A Dynamic Market Maker serves as an automated trading system that provides liquidity for assets by continuously adjusting buy and sell prices based on market conditions. Unlike traditional market makers, which often use fixed strategies, dynamic market makers respond to real-time data, ensuring that prices reflect current supply and demand levels.These systems employ algorithms that analyze various market factors such as trading volume, price movements, and order book depth. By doing so, they can offer competitive prices to traders while managing risks associated with price volatility and liquidity.Dynamic market makers play a crucial role in decentralized exchanges by enhancing the efficiency of trading. They help reduce spreads, making it easier for users to execute trades without significant price impact. This adaptability not only facilitates smoother transactions but also contributes to more stable pricing in the market by quickly responding to changing conditions.