Automated market makers (AMM) have grown to obtain significant market share within the cryptocurrency ecosystem, resulting in a proliferation of new products pursuing exotic strategies for horizontal differentiation. Yet, their theoretical properties are curiously homogeneous when a set of basic assumptions are met. In this paper, we start by presenting a universal approach to deriving a formula for liquidity provisioning for AMMs. Next, we show that the constant function market maker and token swap market maker models are theoretically equivalent when liquidity reserves are uniform. Proceeding with an examination of AMM market microstructure, we show how non-linear price effect translates into slippage for traders and impermanent losses for liquidity providers. We proceed by showing how impermanent losses are a function of both volatility and market depth and discuss the implications of these findings within the context of the literature.
翻译:自动市场制造者(AMM)已发展到在加密货币生态系统内获得相当大的市场份额,导致追求横向差别的异国战略的新产品激增;然而,在满足一套基本假设时,他们的理论特性奇异地相同;在本文件中,我们首先提出一种普遍办法,为AMMs提供流动性公式;接着,我们表明,当流动性储备一致时,经常功能市场制造者和象征性交换市场制造者模式在理论上是等同的;在审查AMM市场微观结构后,我们显示了非线性价格效应如何转化为贸易商的滑坡,流动资金提供者的永久损失;我们从文献的角度展示非永久性损失是如何波动和市场深度的函数,并讨论这些结论的影响。