> For the complete documentation index, see [llms.txt](https://docs.native.org/native-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.native.org/native-whitepaper/introduction/flexible-market-making.md).
# Flexible Market Making
A traditional private market maker works with significant resources and complex off-chain strategies to help end users get a good price and maintain a tight bid-ask spread within a centralized exchange’s CLOB (central limit order book).
An automated market maker (AMM) relies on a mathematical formula to price assets. Instead of using an order book like a traditional exchange, assets are priced according to a pricing algorithm. AMMs are useful because they decentralize the market making process and let anyone make a market on a blockchain.
AMMs are decentralized and non-custodial, but they are not as efficient as centralized exchanges and private market makers. They require more capital to provide the same liquidity and only support one pricing model for any given liquidity pool. Capital efficiency is important, and projects need different pricing models at different stages of their lifecycles. This is why so many projects are still using traditional private market makers on centralized exchanges.
The crypto ecosystem needs a permissionless way to provide liquidity with sophisticated, efficient pricing models. We need to bring together the efficiency of a private market maker using a centralized exchange with the on-chain settlement and custody of an AMM.
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