Smart Contracts
Intermediate
What is
AMM (Automated Market Maker)?
A DEX mechanism using liquidity pools and algorithms instead of order books for trading.
AMMs replace traditional order books with liquidity pools and mathematical formulas (like x*y=k) to determine prices. Liquidity providers deposit token pairs and earn fees from trades. On Ergo, AMMs benefit from eUTXO's atomic execution and a reduced surface for common sandwich patterns.
Key Points
- No order book needed
- Prices set by algorithm (x*y=k)
- Liquidity providers earn fees
- Anyone can provide liquidity
- Slippage depends on pool depth
- eUTXO reduces common MEV patterns
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Frequently Asked Questions
Questions about AMM (Automated Market Maker)
Common questions about this topic
How to use Spectrum DEX on Ergo?
Spectrum Finance is best treated as a historical Ergo DEX reference: the team published a sunset notice and froze contracts in February 2024. If you are studying old Ergo AMM flows, review Spectrum as a reference implementation, but do not assume it is an active venue for new swaps or liquidity. For any live trading, verify the current venue, liquidity, contract status, and official links first.
How-to
DeFi
How to provide liquidity on Ergo?
Providing liquidity on Ergo depends on the current active DEX or AMM venue. In general, you deposit equal value of two assets into a pool, receive LP tokens representing your share, and earn a portion of trading fees. Spectrum Finance is historical/frozen since February 2024, so verify the active venue, contracts, liquidity depth, and withdrawal process before depositing funds.
How-to
DeFi
How to get started with Ergo?
Start by getting a wallet (Nautilus for browser, Terminus for mobile). Back up your seed phrase securely offline. Get some ERG from a current exchange or verified venue, then make a small test transaction. After that, explore NFTs, mining, DeFi references, or the developer stack if you're a builder.
How-to
Getting Started
Is Ergo a good investment?
This is not financial advice. Ergo has strong fundamentals: fair launch (no VC dump risk), innovative technology (eUTXO, Sigma Protocols, NiPoPoWs), active development, and a cypherpunk ethos. It's a smaller market cap project with higher risk/reward than established chains. Research thoroughly, understand the technology, and never invest more than you can afford to lose.
Comparison
Getting Started