CoinEx’s Automated Market Maker (AMM) feature brings a decentralized trading approach to its platform, allowing users to participate in liquidity pools and earn returns in a straightforward, accessible way. With CoinEx AMM, users can provide liquidity to specific trading pairs and potentially earn a passive income through Annual Percentage Yields (APY) generated by trading fees and other rewards.
What Is CoinEx AMM and How to Participate?
CoinEx AMM combines traditional market-making strategies with decentralized finance (DeFi) principles. With AMM, users can add liquidity to specific trading pairs by depositing assets into a liquidity pool. In exchange, they receive a share of trading fees from transactions involving that pair, earning yield on their holdings. Participating in CoinEx’s AMM is straightforward: users can go to the AMM page on the CoinEx website, select a trading pair, deposit assets, and start earning.
The revenue of CoinEx AMM mainly comes from the trading fee incomes allocated by the platform. For all CET trading markets, 100% of the trading fees will be rewarded to liquidity providers, while in other AMM markets, 50% of the trading fees will be rewarded to liquidity providers. The trading fee incomes are calculated hourly, and injected into the liquidity pool. You can obtain accumulated returns when withdrawing liquidity.
Trading Pair and APY: Spotlight on BURGER/USDT
CoinEx AMM supports a variety of trading pairs, each offering different APYs based on the activity and demand within the pool. The BURGER/USDT trading pair is one option for those looking to earn returns.
By depositing BURGER and USDT into the liquidity pool, participants can potentially earn significant APY. The APY on each trading pair varies, as it depends on factors like trading volume, the number of liquidity providers, and overall demand. Users can view the current APY for all trading pairs directly on the CoinEx AMM page, allowing them to assess potential returns before deciding to contribute.
(As of 28 March, 2025)
Benefits of CoinEx AMM as an Investment Option
AMM offers users multiple benefits as an investment choice:
- Passive Income: Liquidity providers earn passive income through the APY generated from trading fees on each transaction involving their selected pair.
- Ease of Access: Users can make real-time transfers from Spot account and AMM account, by adding and removing liquidity. In every single market, there is no upper limit for each user or additional fees to inject liquidity.
- Portfolio Diversification: By investing in different trading pairs, users can diversify their holdings and potentially maximize returns across multiple assets.
- Enhanced Liquidity: AMM helps boost liquidity within the CoinEx ecosystem, benefiting the platform and its users by facilitating smoother trades with minimal slippage.
Risk Considerations
While CoinEx AMM offers appealing benefits, users should also be aware of certain risks:
- Impermanent Loss: If the price of an asset in the liquidity pool fluctuates significantly, users may experience impermanent loss, which can affect their overall returns.
- Market Volatility: The cryptocurrency market is known for its high volatility, which can impact both the value of assets in a liquidity pool and the associated rewards.
- Platform-Specific Risks: As with any exchange, there are risks associated with platform security and operational stability. CoinEx has implemented numerous safeguards, but no platform is entirely risk-free.
Conclusion
CoinEx AMM provides an accessible and potentially profitable way for users to earn passive income through decentralized liquidity pools and allows participants to earn rewards based on trading fees while supporting CoinEx's liquidity.
However, it’s essential to consider the associated risks, including impermanent loss and market volatility, when evaluating AMM as an investment. For those interested in exploring decentralized finance, CoinEx AMM offers a gateway with benefits and considerations well worth examining.
*This article is for informational purposes only and does not constitute investment advice
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