Systematization of knowledge: constant function market makers

Michele Fabi; Myriam Kassoul; Julien Prat

doi:10.4337/9781035307760.00015

Systematization of knowledge: constant function market makers

Michele Fabi
, Myriam Kassoul
, Julien Prat

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

Abstract

We provide an overview of the academic literature on Automated Market Makers for Decentralized Exchanges. Our review puts an emphasis on contributions from researchers in economics and finance. We cover papers that study the optimal design of Automated Market Makers. Then we discuss models that leverage the insights from the literature on two-sided markets to characterize the equilibrium size of liquidity pools and the incentives of liquidity providers. Finally, we review recent research on the interactions between Miner Extractible Value and Decentralized Exchanges.

Original language	English
Title of host publication	The Elgar Companion to Decentralized Finance, Digital Assets, and Blockchain Technologies
Publisher	Edward Elgar Publishing Ltd.
Pages	191-216
Number of pages	26
ISBN (Electronic)	9781035307760
ISBN (Print)	9781035307753
DOIs	https://doi.org/10.4337/9781035307760.00015
Publication status	Published - 1 Jan 2024

Keywords

Automated market makers
Constant function market makers
Decentralized exchanges
Miner extractable value

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10.4337/9781035307760.00015

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Systematization of knowledge: constant function market makers

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