> For the complete documentation index, see [llms.txt](https://chocolateswap-1.gitbook.io/chocolateswap/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://chocolateswap-1.gitbook.io/chocolateswap/intro/key-components/automated-market-maker-amm.md).

# Automated Market Maker (AMM)

ChocolateSwap uses Automated Market Maker (AMM) as the core algorithm for trading to ensure fair, transparent and decentralised prices during the trading process. AMM provides users with real-time trading prices by replacing traditional buy and sell order books with algorithms. the benefits of AMM include：

1. Improved trading efficiency: AMM is implemented through smart contracts, eliminating the time cost of traditional order book matching. 
2. Reduced costs: AMM is based on the principle of decentralisation, reducing the involvement of intermediaries and lowering transaction costs. 
3. Greater liquidity: AMM provides richer liquidity by aggregating funds from multiple users through a liquidity pool.