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Silkswap: An asymmetric automated market maker model for stablecoins

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  • Nicola Cantarutti
  • Alex Harker
  • Carter Woetzel

Abstract

Silkswap is an automated market maker model designed for efficient stablecoin trading with minimal price impact. The original purpose of Silkswap is to facilitate the trading of fiat-pegged stablecoins with the stablecoin Silk, but it can be applied to any pair of stablecoins. The Silkswap invariant is a hybrid function that generates an asymmetric price impact curve. We present the derivation of the Silkswap model and its mathematical properties. We also compare different numerical methods used to solve the invariant equation. Finally, we compare our model with the well-known Curve Finance model.

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  • Nicola Cantarutti & Alex Harker & Carter Woetzel, 2023. "Silkswap: An asymmetric automated market maker model for stablecoins," Papers 2302.07822, arXiv.org.
    • Handle: RePEc:arx:papers:2302.07822
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    References listed on IDEAS

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    1. Guillermo Angeris & Tarun Chitra, 2020. "Improved Price Oracles: Constant Function Market Makers," Papers 2003.10001, arXiv.org, revised Jun 2020.
    2. 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.
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