# 7.1 - AMM Architecture
nest is built around a **unified AMM**: one venue + one router that can support multiple pool types without fragmenting liquidity. The goal is simple, **best execution for traders** and **the right liquidity shape for each asset**, all under one governance/incentive surface.
At the core, nest uses a **Concentrated Liquidity AMM (CLAMM)** based on **Algebra Integral**, where LPs can provide liquidity inside a chosen range to increase effective depth near the current price.
Why this matters:
* **Modular architecture:** keep core pricing/liquidity accounting more immutable, extend behavior via plugins/hooks (less migration, less fragmentation).
* **Dynamic fees (where enabled):** fees can adjust with conditions (volatility/volume) to balance execution vs LP risk.
* **Hooks (where enabled):** pools can add behaviors like launch protections to reduce early bot exploitation on new launches.
* **Multiple pool types:** not every asset should live in the same curve; unified routing keeps it cohesive.
Important distinction:
* **Pools can be permissionless** (anyone can deploy/provide liquidity),
* but **emissions are governance-directed** (veNEST decides where incentives go).
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