IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2301.08558.html
   My bibliography  Save this paper

About constant-product automated market makers

Author

Listed:
  • Th'eodore Conrad
  • Arthur Vinciguerra
  • Guillaume M'erou'e

Abstract

Constant-product market making functions were first introduced by Hayden Adams in 2017 to create Uniswap, a decentralised exchange on Ethereum. This enables users to exchange assets at any given rate. Some variations such as Balancer and Curve were later introduced. In this paper, we analyse the maths that rule this type of protocol. We show that splitting a trade in multiple smaller trades does not impact the final exchange rate. We also show that the protocol is safer and more profitable when no one recompounds their fees.

Suggested Citation

  • Th'eodore Conrad & Arthur Vinciguerra & Guillaume M'erou'e, 2023. "About constant-product automated market makers," Papers 2301.08558, arXiv.org.
    • Handle: RePEc:arx:papers:2301.08558
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2301.08558
    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. Wang, Ziqi & Hou, Sizu, 2024. "Optimal participation of battery swapping stations in frequency regulation market considering uncertainty," Energy, Elsevier, vol. 302(C).
    2. Wiatrowski, Matthew R. & Miller, Jacob H. & Bhatt, Arpit & Tifft, Stephen M. & Abdullah, Zia & Tao, Ling, 2024. "Economic and sustainability prospects for wet waste valorization: The case for sustainable aviation fuel from arrested anaerobic digestion," Renewable Energy, Elsevier, vol. 232(C).

    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:2301.08558. 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.