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Automated market makers (AMMs) offer continuous market liquidity and decentralized trading mechanisms that make a whole host of DeFi innovations viable. Recently, a few projects — including memecoin launchpad pump.fun — have taken an interest in developing their own use case-specific AMMs, veering away from reliance on third-party platforms.

To understand this trend, we need a more intimate understanding of how AMMs work, the problems they solve, and the strategic advantage of customizing liquidity mechanisms to align  with project objectives.

AMMs remove TradFi’s order book model…

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