How PancakeSwap’s Automated Market Maker (AMM) Model Works vs Order Book Exchanges
A trader wants to exchange 10 Ethereum for USDC using PancakeSwap, but the quoted price differs from what they see on a centralized exchange. The difference is not a mistake. It reflects a fundamental architectural choice: PancakeSwap operates as an automated market maker, a system that determines prices algorithmically based on liquidity pool ratios rather …
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