Definition
An AMM pool is a collection of crypto tokens held inside a smart contract that uses an automated market maker (AMM) formula to set prices between the tokens. Instead of matching buyers and sellers directly, the pool itself acts as the counterparty for trades. The ratio of tokens in the pool and the underlying AMM rules determine how much of one token is received for another. AMM pools are a core concept in many decentralized finance platforms that rely on algorithmic pricing rather than traditional order books.
In Simple Terms
An AMM pool can be thought of as a shared pot of two or more tokens that is always ready to trade with anyone at a price set by a formula. When someone trades against the pool, the amounts of each token inside it change, and the price adjusts automatically based on those new balances. The pool exists on-chain inside a smart contract, so its rules and token balances are transparent and enforced by code. AMM pools work together with the broader AMM design to keep trading open as long as there are tokens in the pool.
Context and Usage
In the context of an AMM, the pool is the specific on-chain structure that actually holds assets and executes swaps according to the AMM logic. Different AMM designs may use different formulas or support different types of pools, but the basic idea of a token pool governed by code remains the same. AMM pools are often described in terms of their token pair, fee structure, and the rules that define how prices respond to changes in token balances. As a concept, the AMM pool separates the idea of algorithmic pricing from traditional exchange mechanics by embedding liquidity and pricing directly into a smart contract.