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CoinFLEX’s Automated Market Maker (AMM+) Will Provide Superior Liquidity to the Exchange
The AMM+ is an Automated Market Maker product that allows users to earn yield passively without having to dedicate much time or energy strategizing, planning, and learning how to actively trade. You can simply let the market do the work for you.
You can set your strategy on the Automated Market Maker depending on which direction you think the market is heading. If you think the price of your asset will increase, you may want to click ‘Buy’, as it is ideal for upward trending markets and accumulating long positions. If you think the price of your asset will decrease, you may want to click ‘Sell’, as it is ideal for downward trending markets and accumulating short positions. If you want to take advantage of both directions, or you think the price will consolidate or fluctuate around a certain area for a set period of time, you may want to choose the neutral option.
CoinFLEX’s Automated Market Maker uses the perpetual futures market, which is why the trading pair is, for example, FLEX/USD PERP compared to the standard FLEX/USD that you would see in the spot market.
Connecting the Automated Market Maker to the perpetual futures market provides users with the option to use up to 10x leverage. This gives users the opportunity to earn 10x profit on CoinFLEX compared to what they would have earned on other Automated Market Makers. Be aware that leverage does have the danger of liquidating your position and is recommended for experienced Automated Market Maker users only.
The Automated Market Maker also provides greater liquidity to the CoinFLEX exchange. Liquidity is a term used to describe the volume of money being traded in markets and is important in creating a smoother and safer trading experience for all users. One of the most important reasons for liquidity is how quickly you can open or close a position.
If the price of an asset is rising or falling rapidly, you would want to enter or exit the market as soon as possible. A seller will want to sell at the highest price possible, a buyer will want to buy at the lowest price possible. If the market has low liquidity, you may not find a buyer or seller to execute your trade, resulting in you staying in the position far longer or executing the order at an undesirable price. Increasing liquidity therefore lowers risk by increasing the speed and accuracy in which your order is executed.
The Automated Market Maker is able to provide the extra liquidity to make markets run far more smoothly through creating liquidity pools. Automated Market Maker users simply allocate capital in the Automated Market Maker page, no different to how users would input the amount of capital they want to trade with on a spot trade for example.
By doing so, users become whats called “liquidity providers” and they benefit from Automated Market Makers by earning exchange fees. Liquidity providers earn the most amount of profit by allocating their capital to where the liquidity is needed the most. This opens up the door for users to explore different strategies based on market conditions and is an excellent way to earn passive income. Users have reported APRs in the triple and even quadruple digits!
If you are interested in CoinFLEX’s new Automated Market Maker, head to www.coinflex.com/amm to join the AMM+ Arena competition starting 23rd August. The weekly top 10 highest earners will be rewarded with USD or our very own FLEX coin depending on what trading pair is used!
Author: Adam Diaz