Every day, thousands of people use a decentralized exchange (DEX) for the first time. However, the idiosyncrasies of a public blockchain routinely catch newcomers off-guard, even those familiar with trading on more traditional venues. As a result, traders bleed money to arbitrageurs and frontrunners, leading to worse-than-necessary execution. At a high level, we can break down the costs of each trade into several parts: 1. Price impact 2. Broker or trading fees 3. Slippage 4. Transaction fees of the underlying blockchain This article on automated market-makers (AMMs) will serve as an intro to the series and discuss the first and most crucial cost: price impact. You will learn: how AMMs like Uniswap V2, Sushiswap, and Balancer determine the prices they quote and how to minimize the price impact of your trade using a few simple strategies. What are liquidity pools? Most DEXs consist of many liquidity pools that represent different trading pairs, like ETH/WBTC. Instead of matching buyers ...