Automated Market Maker
Also called: AMM, constant product formula, x*y=k
An automated market maker prices trades with a formula against a pool of two assets instead of matching orders. The classic constant-product rule keeps the product of the two balances fixed, so each purchase raises the price of what you're buying. It was the innovation that made on-chain trading viable, and it means large trades move the price mechanically — the source of slippage on DEXs.
Formula
x × y = k (pool balances multiply to a constant)