# Automated Market Makers (AMMs)

A significant innovation in Web3 market-making is the concept of Automated Market Makers (AMMs). AMMs are decentralised protocols that rely on liquidity pools—pots of tokens locked in a smart contract—to facilitate trades directly between users without needing traditional order books. 

This model has transformed how liquidity is provided in decentralised markets, making it accessible to anyone willing to contribute their assets to a liquidity pool.