DAMM

DAMM stands for Dynamic Automated Market Maker and is an advanced type of traditional liquidity pool mechanism used in protocols like Meteora on the Solana blockchain. It builds on the traditional AMM (Automated Market Maker) model by introducing dynamic fee adjustments and enhanced flexibility for liquidity providers (LPs).

Unlike traditional AMMs, where trading fees are fixed, DAMM dynamically adjusts fees in real-time based on market conditions such as volatility and trading volume. This allows liquidity providers to capture higher fees during periods of increased market activity while offering lower fees when volatility is low, optimizing returns and improving user experience.