A Constant Function Market Maker (CFMM) is a type of decentralized exchange that facilitates trading without relying on traditional order books. Instead, it uses a mathematical formula to determine prices based on supply and demand.In a CFMM, users can trade assets directly with the liquidity pool managed by a smart contract. The most common formula used is the constant product formula, represented as x * y = k, where x and y are the quantities of two assets in the pool, and k is a constant. This means that as one asset is bought, its quantity decreases while the other increases, maintaining the constant.CFMMs provide liquidity for traders while simultaneously allowing liquidity providers to earn fees based on the volume of trades. This model minimizes the risks of price manipulation and provides a more efficient trading environment.Popular examples of CFMMs include Uniswap and Balancer. They have gained traction due to their user-friendly approach and the ability for anyone to participate without needing a centralized authority.