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In decentralized finance ("DeFi"), automated market makers (AMMs) enable traders to programmatically exchange one asset for another. Such trades are enabled by the assets deposited by liquidity providers (LPs). The goal of this paper is to…

Computer Science and Game Theory · Computer Science 2023-11-29 Jason Milionis , Ciamac C. Moallemi , Tim Roughgarden

Decentralized exchanges (DEXs) are crucial to decentralized finance (DeFi) as they enable trading without intermediaries. However, they face challenges like impermanent loss (IL), where liquidity providers (LPs) see their assets' value…

Computer Science and Game Theory · Computer Science 2026-03-04 Irina Lebedeva , Dmitrii Umnov , Yury Yanovich , Ignat Melnikov , George Ovchinnikov

This paper proposes a decentralized energy management (DEM) strategy for a network of local microgrids, providing economically balanced energy schedules for all participating microgrids. The proposed DEM strategy can preserve the privacy of…

Systems and Control · Electrical Eng. & Systems 2023-04-10 Jesus Silva-Rodriguez , Xingpeng Li

A novel decentralized peer-to-peer-to-grid (P2P2G) trading mechanism considering distribution network integrity is proposed. In order to direct prosumers' peer-to-peer (P2P) trading behavior to be grid-friendly, the proposed method…

Systems and Control · Electrical Eng. & Systems 2023-11-27 Zhisen Jiang , Ye Guo , Hongbin Sun , Jianxiao Wang

Decentralized Exchanges (DEXs) are new types of marketplaces leveraging Blockchain technology. They allow users to trade assets with Automatic Market Makers (AMM), using funds provided by liquidity providers, removing the need for order…

Computer Science and Game Theory · Computer Science 2023-02-08 Yogev Bar-On , Yishay Mansour

Many algorithms for congestion control, scheduling, network measurement, active queue management, security, and load balancing require custom processing of packets as they traverse the data plane of a network switch. To run at line rate,…

Networking and Internet Architecture · Computer Science 2016-02-02 Anirudh Sivaraman , Mihai Budiu , Alvin Cheung , Changhoon Kim , Steve Licking , George Varghese , Hari Balakrishnan , Mohammad Alizadeh , Nick McKeown

Automated Market Makers (AMMs) are a central component of decentralized exchanges, yet their equilibrium foundations and microeconomic mechanisms remain incompletely understood. This paper develops a dynamic equilibrium framework for…

General Economics · Economics 2026-03-10 Chengqi Zang , Zhenghui Wang , Weitong Zhang

Mobility systems often suffer from a high price of anarchy due to the uncontrolled behavior of selfish users. This may result in societal costs that are significantly higher compared to what could be achieved by a centralized system-optimal…

Systems and Control · Electrical Eng. & Systems 2023-05-26 David van de Sanden , Maarten Schoukens , Mauro Salazar

The asset trading volume on blockchain-based exchanges (DEX) increased substantially since the advent of Automated Market Makers (AMM). Yet, AMMs and their forks compete on the same blockchain, incurring unnecessary network and block-space…

Cryptography and Security · Computer Science 2021-06-21 Liyi Zhou , Kaihua Qin , Arthur Gervais

Within this work we consider an axiomatic framework for Automated Market Makers (AMMs). AMMs are smart contracts that set prices for swaps on a pool of assets. By imposing reasonable axioms on the underlying utility function, we are able to…

Mathematical Finance · Quantitative Finance 2025-02-04 Maxim Bichuch , Zachary Feinstein

This whitepaper introduces an innovative mechanism for pricing perpetual contracts and quoting fees to traders based on current market conditions. The approach employs liquidity curves and on-chain oracles to establish a new adaptive…

Trading and Market Microstructure · Quantitative Finance 2023-09-01 Chester Bella , Danny Boahen , Sudeep Biswas

Achieving coordination is crucial in organizational control. This paper investigates a middle ground solution between decentralized interactions and centralized administrations for coordinating agents beyond inefficient behavior. We first…

Multiagent Systems · Computer Science 2018-11-12 Chao Yu

An automated market maker (AMM) is a state machine that manages pools of assets, allowing parties to buy and sell those assets according to a fixed mathematical formula. AMMs are typically implemented as smart contracts on blockchains, and…

Trading and Market Microstructure · Quantitative Finance 2024-01-29 Kenan Wood , Maurice Herlihy , Hammurabi Mendes , Jonad Pulaj

The study proposes a quote-driven predictive automated market maker (AMM) platform with on-chain custody and settlement functions, alongside off-chain predictive reinforcement learning capabilities to improve liquidity provision of…

Trading and Market Microstructure · Quantitative Finance 2023-01-27 Tristan Lim

Passive liquidity providers (LPs) in automated market makers (AMMs) face losses due to adverse selection (LVR), which static trading fees often fail to offset in practice. We study the key determinants of LP profitability in a dynamic…

Trading and Market Microstructure · Quantitative Finance 2025-08-12 Steven Campbell , Philippe Bergault , Jason Milionis , Marcel Nutz

Automated Market Makers (AMMs) are decentralized applications that allow users to exchange crypto-tokens without the need for a matching exchange order. AMMs are one of the most successful DeFi use cases: indeed, major AMM platforms process…

Cryptography and Security · Computer Science 2022-07-20 Massimo Bartoletti , James Hsin-yu Chiang , Alberto Lluch-Lafuente

In this paper, we introduce a novel framework to model the exchange rate dynamics between two intrinsically linked cryptoassets, such as stablecoins pegged to the same fiat currency or a liquid staking token and its associated native token.…

Trading and Market Microstructure · Quantitative Finance 2024-11-14 Philippe Bergault , Louis Bertucci , David Bouba , Olivier Guéant , Julien Guilbert

In the ever evolving landscape of decentralized finance automated market makers (AMMs) play a key role: they provide a market place for trading assets in a decentralized manner. For so-called bluechip pairs, arbitrage activity provides a…

Statistical Finance · Quantitative Finance 2025-05-16 Abe Alexander , Lars Fritz

Decentralized exchanges (DEXes) have introduced an innovative trading mechanism, where it is not necessary to match buy-orders and sell-orders to execute a trade. DEXes execute each trade individually, and the exchange rate is automatically…

Computational Finance · Quantitative Finance 2021-10-12 Lioba Heimbach , Ye Wang , Roger Wattenhofer

Stablecoins are a class of cryptocurrencies which aim at providing consistency and predictability, typically by pegging the token's value to that of a real world asset. Designing resilient decentralized stablecoins is a challenge, and…

Computer Science and Game Theory · Computer Science 2024-10-30 Nicholas Strohmeyer , Sriram Vishwanath , David Fridovich-Keil