Automated Market Makers (AMMs) are algorithms that provide liquidity and maintain a fair market price for tokenized assets on digital marketplaces. They:

1. _Provide liquidity_: AMMs ensure that there is always a buyer or seller available, making it easier to buy and sell assets.

2. _Tighten bid-ask spreads_: AMMs reduce the difference between the prices at which buyers are willing to buy and sellers are willing to sell, making markets more efficient.

3. _Maintain fair market prices_: AMMs adjust prices based on market conditions, ensuring that assets are fairly valued.

4. _Reduce volatility_: AMMs can help stabilize prices, reducing the impact of sudden market fluctuations.

5. _Increase market efficiency_: AMMs automate the process of matching buyers and sellers, reducing the need for manual intervention.

6. _Enable 24/7 trading_: AMMs allow markets to operate continuously, even outside traditional trading hours.

7. _Improve price discovery_: AMMs help determine fair market prices, reflecting the true value of assets.

8. _Enhance market transparency_: AMMs provide clear and transparent pricing, enabling investors to make informed decisions.

By utilizing AMMs, digital marketplaces can create more efficient, liquid, and accessible markets for tokenized assets, benefiting both investors and issuers.