CREMA: The evolution of exchanges.

In the traditional finance Institutions, exchanges were filled by order books. Basically, if Jack had 1000 dollars and wanted to buy yen, and Jin had 1000 yen and wanted to buy dollars, they would meet at a an exchange and the order books get filled. It was effective but had its downsides.

First, it was too slow. Imagine if the orders don’t match. If Jin had 1000 yen to sell at the rate of 1 dollar to 10 yen and Jack had a thousand yen. It would take a lot more tie to fill their orders because they both would have to come into agreement on a particular range rate.

Next, it is way too expensive. Or every transaction, you were charged, whether successful or Not. And since you were unsure of the price, you would lose a lot more money. It was because of this the Automated Market Maker system was created.

The Automatic Market Maker (AMM) system is designed with smart contracts. These code work on a single formula x X y = K. this made the system efficient, fast, and at a low cost. This would also profit the liquidity providers much more than the traditional exchanges. The money allocated is disbursed equally across all prices

However, with the introduction of the Concentrated Liquidity Market Maker, exchanges just got more and more interesting (CLMM). CLMM allows exchanges to occur at the best affordable prices and less expensive rates, and these rates are used to pay the liquidity providers. Hence, you can make more money. This is because the money allocated isn’t spread equally through all prices, however, you can decide where you would love to place concentrates liquidity on, procuring better prices for both the traders and the liquidity providers.

Crema Finance is the first of this on the Solana Ecosystem! Why not join crema today?

Visit us : www.crema.finance