AMMs

Market Making in Decentralized Finance

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Time Stamp: January 30, 2023 11:18 AM - Modified On: January 30, 2023 - Published By:
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Republished By Plato

Defi market making is a burgeoning industry in the decentralized finance space. AMMs, aka Automated Market Makers, have become a staple of the decentralized exchange industry, and are an excellent means of facilitating the exchange of assets at a desired price. However, market makers must be cautious about the risks involved. Among other things, borrowing inventory from other participants is a major challenge. In addition, the market maker must be mindful of the risks posed by price fluctuations. If the market maker is uninformed, he may not be able to

The Four Quadrants of MEV Protection

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Time Stamp: November 22, 2022 11:55 AM - Modified On: November 22, 2022 - Published By:
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Republished By Plato

Understanding the MEV Solution Landscape Like many other crypto narratives, the dark side of blockchain was first introduced on Reddit in a post titled “Miners Frontrunning.” In the now historical post, the author outlines how given the Ethereum mempool is inherently public, miners can frontrun transactions and profit on the ultimately arbitraged difference in that transaction. However, this isn’t an entirely new phenomenon in finance. The 2014 book, Flash Boys: A Wall Street Revolt by Michael Lewis investigates frontrunning orders in high-frequency trading. The paper Flash Boys 2.0, published in 2019, takes these observations into

The Evolution of AMMs

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Time Stamp: August 28, 2022 2:57 PM - Modified On: August 28, 2022 - Published By:
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Republished By Plato

The Complex History of the Future of Finance Author: Benny Attar Ever since the dawn of financial history, markets had to be made. Tracing back to 17th century spice trading where intermediaries bought and sold shares to offer investors higher liquidity, market making has evolved tremendously. Through equities, foreign exchange rates, and even physical assets, market makers today provide liquidity and are ready to buy any asset at publicly quoted prices. However, as time passes, financial markets evolve alongside it. The past several years, we’ve seen an incredible increase in