# Automated market maker

Also written AMM.

*https://predictionmarkets.tools/glossary/automated-market-maker · next to Prediction Market Venues*

**Definition:** A funded pricing formula that stands in for a counterparty. It always has a quote, and the quote moves against you as your order grows, which is how it stays solvent. Liquidity providers put up the money behind it and hold whatever position it took. The trap is that a curve shows a confident two-decimal probability on a market nobody has traded, because a curve cannot be empty.

Three mechanisms put a number on the screen in this sector, and this is the one that cannot fail
to produce one. That property is worth understanding before you read any price on
[Myriad](https://predictionmarkets.tools/tools/myriad), [Futuur](https://predictionmarkets.tools/tools/futuur), [Manifold](https://predictionmarkets.tools/tools/manifold) or a Limitless AMM
market, because it is the difference between a market telling you something and a market telling
you nothing in exactly the same typeface.

## How it works

Replace the queue of human orders with a funded pricing function. You always get a quote, because
the function always has one. The quote moves against you as your order grows, because the
function has to stay solvent against the position it is taking. Myriad documents the constraint
that makes the output readable at all — outcome prices always sum to $1.00, so a displayed $0.60
is the curve's implied 60%. Futuur's own help centre describes the behaviour plainly on the other
side of the trade, saying the automated market maker determines the price where the order book is
empty and charges a higher price the more you trade, to limit its risk exposure.

Three things follow, and none of them is true of a book.

1. **Slippage is your own footprint, and it is not in any fee schedule.** On a book a large order
   eats successive levels that were put there by other people. On a curve a large order moves the
   curve, and the average price you pay is strictly worse than the price you were shown. No venue
   publishes this as a rate, because it depends on your order against that specific market's
   depth. On a thin market it is routinely larger than the fee.
2. **Somebody funded it, and they are holding the other side.** Liquidity providers supply the
   depth and collect a share of the fee. They are not taking a view on the question. On Manifold
   the creator seeds the pool with the creation fee, which is why a market with one participant
   still quotes.
3. **Low volume and a confident price coexist.** This is the single most misleading combination in
   the sector, and it has nothing to do with the venue being careless. A formula has no way to
   express "nobody has been here."

### Most AMM venues are hybrids, and the card says so

The enum value records where the price comes from when nothing else can supply one, not that
there is only one mechanism. Manifold's own FAQ says it uses a combination of limit orders and an
automated market maker, and that trades fill against limit orders first and the AMM second.
Futuur takes ordinary market and limit orders and falls back to the curve. Limitless does neither
— it runs AMM markets and order-book markets as distinct market types, each with its own fee
schedule, so which one you are in is a property of the market rather than of the moment. Of the
six cards here carrying `economics.liquidity_model: amm`, five also carry
`capabilities.order_book: true`.

### It is not a parimutuel pool, even though both always show a number

A parimutuel pool shows you an implied price that is provisional until the pool closes, and there
is nothing to sell before then. A curve shows you a price you can take now and close out of later,
at whatever the curve says then. The two look similar on a screen and behave nothing alike the
moment you want out.

## Why it matters here

**You will read a two-decimal number as a forecast.** On 19 September 2026 every one of the 70
open markets returned by Myriad's public API was an AMM market, and of the 39 denominated in a
stablecoin the median had traded about $11,500 and carried about $1,000 of liquidity. Each showed
a confident probability. The number was the curve's arithmetic, not a crowd's opinion.
[Where the liquidity comes from](https://predictionmarkets.tools/guides/where-liquidity-comes-from) has the four measurements
that tell the two apart.

**You will compare the fee against a coefficient venue and get the ranking backwards.** An AMM
here charges a percentage of what the fill costs. A contract bought at 50 cents with a 1% AMM fee
carries half a cent of charge, which is 0.5% of the dollar it pays — which is why
[Myriad](https://predictionmarkets.tools/tools/myriad) carries `fees_taker: 0.5` and not `1`. Every card in this catalogue
normalises to the effective fee at fifty cents for exactly this reason;
[what a trade actually costs](https://predictionmarkets.tools/guides/what-a-trade-actually-costs) does the conversion for all
four bases in use.

**You will size an order off the displayed price.** The quote you see is the price of an
infinitesimal trade. What you pay is the average along the curve, and on a market holding a
thousand dollars of liquidity a few hundred dollars of order is a large fraction of it. Place a
small order first and read what came back.

**You will assume the depth is somebody's conviction.** It is not. It is an inventory position
someone took to earn fees, and it will quote you just as confidently into a question whose
resolution source has already said something the market has not noticed.

## Where you will meet this

- [Artemis prediction-market metrics](https://predictionmarkets.tools/tools/artemis-prediction-markets.md)
- [Brier.fyi](https://predictionmarkets.tools/tools/brier-fyi.md)
- [CCXT](https://predictionmarkets.tools/tools/ccxt.md)
- [Crypto.com Prediction](https://predictionmarkets.tools/tools/crypto-com-prediction-markets.md)
- [Polymarket dashboards on Dune](https://predictionmarkets.tools/tools/dune-polymarket-dashboards.md)
- [ForecastEx](https://predictionmarkets.tools/tools/forecastex.md)
- [Futuur API](https://predictionmarkets.tools/tools/futuur-api.md)
- [Futuur](https://predictionmarkets.tools/tools/futuur.md)
- [Good Judgment Open](https://predictionmarkets.tools/tools/good-judgment-open.md)
- [Kalshi API](https://predictionmarkets.tools/tools/kalshi-api.md)
- [Limitless API](https://predictionmarkets.tools/tools/limitless-api.md)
- [limitless-sdk](https://predictionmarkets.tools/tools/limitless-sdk.md)

## FAQ

### Does an AMM market always have a price?

Yes, and that is the problem rather than the feature. A curve is a formula, so it returns a number whether or not anyone has ever traded the market. On 19 September 2026 every one of the 70 open markets Myriad's public API returned was an AMM market, the median stablecoin market had traded about $11,500 and held about $1,000 of liquidity, and all of them displayed a two-decimal probability.

### If a card says liquidity_model amm, does it have no order book?

Usually it has both. Five of the six AMM cards in this catalogue also carry capabilities.order_book true. Manifold fills a trade against resting limit orders first and against the curve only afterwards; Futuur quotes from the curve where the book is empty; Limitless runs AMM markets and order-book markets side by side as separate market types with separate fee schedules.

### Is a 2% AMM fee worse than a 1.75% coefficient?

No, and the units are why. An AMM here charges a percentage of what the fill costs, so 1% on a contract bought at 50 cents is half a cent, which is 0.5% of the dollar that contract pays. A coefficient venue charging 0.07 takes 1.75 cents on the same contract. The larger published number is the smaller charge.

### Who is on the other side when I trade against a curve?

The liquidity providers who funded it. They are not predicting anything; they are holding whatever position the curve took against you, in exchange for a share of the fee. On Manifold the market's creator seeds that pool with the creation fee, which is why a question nobody else cares about still has a quote.

## Sources

1. [AMM](https://docs.myriad.markets/trading/amm) — Myriad, read 2026-09-19
2. [Automated Market Maker](https://help.futuur.com/Automated-Market-Maker-e9e850e50d794d85985bbb3cbfa0fd89) — Futuur, read 2026-09-19
3. [FAQ](https://docs.manifold.markets/faq) — Manifold, read 2026-09-19
4. [Fees](https://docs.limitless.exchange/user-guide/fees) — Limitless Exchange, read 2026-09-19

*Last updated 2026-09-21. A reference page, corrected in place — not a dated post.*