Julian's Notes

Automated Market Makers (AMM)

A method used in [defi] for building decentralized exchanges. Replaces the traditional order book with a constand-product function for price discovery.

  • [uniswap] (2018): The first AMM that achieved meaningful volumes and kickstarted the AMM wave in DeFi. Uniswap achieved this largely because of its simplicity.
  • [curve-fi] (2019): The first AMM optimized for stable asset baskets.
  • Balancer (2020): The first AMM to enable liquidity pool creators to customize weights between two or more assets in the single pool.
  • [bancor] V2 (2020): The first AMM to introduce dynamic weights for liquidity pools by realizing the losses by Bancor LPs to mitigate impermanent loss. Bancor also lets you provide only one side of the liquidity to the pool.
  • Blackholeswap (2020): The first AMM that can process transactions exceeding its existing liquidity by tapping into the excess supply on Compound or other lending protocols.
  • vAMM (Virtual Automated Market Makers; 2020): Removes need for LPs with traders putting up collateral. Used for [perpetuals].

Referred in

Automated Market Makers (AMM)