IDEAS home Printed from https://ideas.repec.org/p/arx/papers/1911.03380.html
   My bibliography  Save this paper

An analysis of Uniswap markets

Author

Listed:
  • Guillermo Angeris
  • Hsien-Tang Kao
  • Rei Chiang
  • Charlie Noyes
  • Tarun Chitra

Abstract

Uniswap -- and other constant product markets -- appear to work well in practice despite their simplicity. In this paper, we give a simple formal analysis of constant product markets and their generalizations, showing that, under some common conditions, these markets must closely track the reference market price. We also show that Uniswap satisfies many other desirable properties and numerically demonstrate, via a large-scale agent-based simulation, that Uniswap is stable under a wide range of market conditions.

Suggested Citation

  • Guillermo Angeris & Hsien-Tang Kao & Rei Chiang & Charlie Noyes & Tarun Chitra, 2019. "An analysis of Uniswap markets," Papers 1911.03380, arXiv.org, revised Feb 2021.
    • Handle: RePEc:arx:papers:1911.03380
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/1911.03380
    File Function: Latest version
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erhan Bayraktar & Asaf Cohen & April Nellis, 2024. "DEX Specs: A Mean Field Approach to DeFi Currency Exchanges," Papers 2404.09090, arXiv.org.
    2. C. Escudero & F. Lara & M. Sama, 2024. "Optimal Trade Characterizations in Multi-Asset Crypto-Financial Markets," Papers 2405.06854, arXiv.org.
    3. Vidal-Tomás, David, 2023. "The illusion of the metaverse and meta-economy," International Review of Financial Analysis, Elsevier, vol. 86(C).
    4. Daniel Kirste & Niclas Kannengie{ss}er & Ricky Lamberty & Ali Sunyaev, 2023. "How Automated Market Makers Approach the Thin Market Problem in Cryptoeconomic Systems," Papers 2309.12818, arXiv.org, revised Sep 2023.
    5. Vijay Mohan, 2022. "Automated market makers and decentralized exchanges: a DeFi primer," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-48, December.
    6. Guillermo Angeris & Akshay Agrawal & Alex Evans & Tarun Chitra & Stephen Boyd, 2021. "Constant Function Market Makers: Multi-Asset Trades via Convex Optimization," Papers 2107.12484, arXiv.org.
    7. Lyudmila Kovalchuk & Volodymyr Kostanda & Oleksandr Marukhnenko & Nataliia Kuchynska & Yuliia Marchuk, 2023. "The Method of Choosing Parameters for Margin Trading Protocols in the Constant Product Model," Mathematics, MDPI, vol. 11(19), pages 1-20, October.
    8. Guillermo Angeris & Alex Evans & Tarun Chitra, 2023. "Replicating market makers," Digital Finance, Springer, vol. 5(2), pages 367-387, June.
    9. Marcello Monga, 2024. "Automated Market Making and Decentralized Finance," Papers 2407.16885, arXiv.org.
    10. Guillermo Angeris & Alex Evans & Tarun Chitra, 2021. "Replicating Monotonic Payoffs Without Oracles," Papers 2111.13740, arXiv.org.
    11. Robin Fritsch & Andrea Canidio, 2024. "Measuring Arbitrage Losses and Profitability of AMM Liquidity," Papers 2404.05803, arXiv.org, revised Apr 2024.
    12. Agostino Capponi & Ruizhe Jia, 2021. "The Adoption of Blockchain-based Decentralized Exchanges," Papers 2103.08842, arXiv.org, revised Jul 2021.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:1911.03380. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.