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Related papers: SAMM: Sharded Automated Market Maker

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Automated market makers (AMMs) have emerged as the dominant market mechanism for trading on decentralized exchanges implemented on blockchains. This paper presents a single mechanism that targets two important unsolved problems for AMMs:…

Trading and Market Microstructure · Quantitative Finance 2025-02-13 Austin Adams , Ciamac C. Moallemi , Sara Reynolds , Dan Robinson

Blockchains have popularized automated market makers (AMMs). An AMM exchange is an application running on a blockchain which maintains a pool of crypto-assets and automatically trades assets with users governed by some pricing function that…

Computer Science and Game Theory · Computer Science 2025-09-16 T-H. Hubert Chan , Ke Wu , Elaine Shi

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

Automated Market Makers (AMMs) are a class of smart contracts on Ethereum and other blockchains that "make markets" autonomously. In other words, AMMs stand ready to trade with other market participants that interact with them, at the…

Mathematical Finance · Quantitative Finance 2022-12-22 Stefan Loesch

An automated market maker (AMM) provides a method for creating a decentralized exchange on the blockchain. For this purpose, individual investors lend liquidity to the AMM pool in exchange for a stream of fees earned from its operations as…

Mathematical Finance · Quantitative Finance 2025-09-30 Maxim Bichuch , Zachary Feinstein

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

Automated market makers (AMMs) are a new prototype of decentralised exchanges which are revolutionising market interactions. The majority of AMMs are constant product markets (CPMs) where exchange rates are set by a trading function. This…

Trading and Market Microstructure · Quantitative Finance 2025-06-19 Álvaro Cartea , Fayçal Drissi , Marcello Monga

We investigate the market microstructure of Automated Market Makers (AMMs), the most prominent type of blockchain-based decentralized exchanges. We show that the order execution mechanism yields token value loss for liquidity providers if…

Trading and Market Microstructure · Quantitative Finance 2021-07-22 Agostino Capponi , Ruizhe Jia

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

Automated market makers (AMMs) are automata that trade electronic assets at rates set by mathematical formulas. AMMs are usually implemented by smart contracts on blockchains. In practice, AMMs are often composed: and outputs from AMMs can…

Distributed, Parallel, and Cluster Computing · Computer Science 2021-09-01 Daniel Engel , Maurice Herlihy

Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of crypto-tokens, without the need to find a counter-party. There are several implementations…

Formal Languages and Automata Theory · Computer Science 2023-06-22 Massimo Bartoletti , James Hsin-yu Chiang , Alberto Lluch-Lafuente

Automated Market Makers (AMMs) are decentralized exchange protocols that provide continuous access to token liquidity without the need for order books or traditional market makers. However, this innovation has failed to scale when it comes…

Computational Engineering, Finance, and Science · Computer Science 2025-06-02 Sumit Vohra

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

As an integral part of the decentralized finance (DeFi) ecosystem, decentralized exchanges (DEXs) with automated market maker (AMM) protocols have gained massive traction with the recently revived interest in blockchain and distributed…

Trading and Market Microstructure · Quantitative Finance 2023-03-16 Jiahua Xu , Krzysztof Paruch , Simon Cousaert , Yebo Feng

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

Automated Market Makers (AMMs) have cemented themselves as an integral part of the decentralized finance (DeFi) space. AMMs are a type of exchange that allows users to trade assets without the need for a centralized exchange. They form the…

Machine Learning · Computer Science 2022-11-29 Dev Churiwala , Bhaskar Krishnamachari

Designing automated market makers (AMMs) is crucial for decentralized token exchanges in cryptoeconomic systems. At the intersection of software engineering and economics, AMM design is complex and, if done incorrectly, can lead to…

Trading and Market Microstructure · Quantitative Finance 2025-03-24 Daniel Kirste , Niclas Kannengießer , Ricky Lamberty , Ali Sunyaev

Decentralized Finance (DeFi) has revolutionized financial markets by enabling complex asset-exchange protocols without trusted intermediaries. Automated Market Makers (AMMs) are a central component of DeFi, providing the core functionality…

Mathematical Finance · Quantitative Finance 2026-02-03 Marco Dessalvi , Massimo Bartoletti , Alberto Lluch-Lafuente

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

Automated Market Makers (AMMs) are an integral component of the decentralized finance (DeFi) ecosystem, as they allow users to exchange crypto-assets without the need for trusted authorities or external price oracles. Although these…

Logic in Computer Science · Computer Science 2024-02-13 Daniele Pusceddu , Massimo Bartoletti
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