You could think of an automated market maker as a robot that’s always willing to quote you a price between two assets.
Not only can you trade trustlessly using an AMM, but you can also become the house by providing liquidity to a liquidity pool.
Meanwhile, automated market maker protocols like Uniswap regularly see competitive volumes, high liquidity, and an increasing number of users.
This formula can vary with each protocol.
In this formula, k is a fixed constant, meaning the pool’s total liquidity always has to remain the same.
The slippage issues will vary with different AMM designs, but it’s definitely something to keep in mind.

Source - https://academy.binance.com/en/articles/what-is-an-automated-market-maker-amm?utm_source=BinanceAcademy&utm_medium=Social&utm_campaign=Article

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