# 2.2 On-Chain Trading Logic

* **Automated Market Making (AMM) Mechanism**: Utilizes the AMM model to handle trading and liquidity management, eliminating the need for traditional order books. User buy/sell operations interact directly with liquidity pools, and trading prices dynamically adjust based on the asset ratio in the pools.
* **Smart Contracts**: Smart contracts automatically execute all trading and liquidity management tasks, ensuring transparency and security of operations.
