What is the essential difference between current DEX, which are basically CLMM (Concentrated Liquidity Market Makers), and the original AMM (Automated Market Makers)?

In simple terms, it is the different positions of capital placement.

1. Traditional AMM (like Uniswap V2): Capital is dispersed

The system forces your capital to be evenly spread across all price ranges from '0 to infinity'.

Problem: No matter what the current market price is, a significant portion of your capital is actually idle and not participating in trades, resulting in very low fee earnings.

2. CLMM (like Uniswap V3 / Orca): Capital is concentrated

It allows you to manually set a specific price range (for example, between 200U and 220U for SOL). You only place your capital within this range.

Advantage: Since capital is concentrated near the prices where trades actually occur, your capital efficiency can increase by tens or even hundreds of times, resulting in higher fee income under the same principal amount.

But there is a cost to this:

CLMM requires you to constantly monitor the prices. Once the market price moves out of your set range, your capital will stop working (no longer earning fees) and may even face a more direct impermanent loss risk compared to traditional AMM.