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Improved Price Oracles: Constant Function Market Makers


Georgios Konstantopoulos: This is the most savage footnote I have ever read in a paper

22 replies, 933 likes

Ethan Buchman: "Uniswap was created with a $100,000 grant from the Ethereum Foundation, whereas 0x & Bancor raised $24 million & $153 million in ICOs. Uniswap currently has roughly 5-10 times the liquidity of 0x & Bancor combined. Both 0x and Bancor now route orders to Uniswap." Wowee!

8 replies, 177 likes

Tarun Chitra: 2020: Cambrian explosion in automated market makers — @UniswapExchange, @BalancerLabs, @ShellProtocol, @CurveFinance, ... A question: Is there a framework to understand why so many constant function market makers (CFMMs) work IRL? Yes! Thread 👇🏾

4 replies, 132 likes

Tarun Chitra: Buzz about constant function market makers (CFMMs) to launch DeFi assets ▶️ complaints of i. @UniswapProtocol has high imp. loss (γ < 0) ii. @BalancerLabs / @CurveFinance / ... have higher γ 👉🏾Is there an optimal IUO curve? Yes! 👀 our updated paper

2 replies, 95 likes

Georgios Konstantopoulos: go read the paper by @tarunchitra @GuilleAngeris, they give you all the information needed to design a Constant Function Market Maker Uniswap, Balancer, Curve, etc. are only 1 form of this "family" of mechanisms, this is only the beginning

1 replies, 34 likes

Tarun Chitra: As @gakonst enjoyed turning our Sunday into footnote fixing day, here is the proposed update. Hopefully, people actually read the rest of the paper instead of fixating on a footnote? I'm not Fermat! cc. @recmo, @tomhschmidt, @abandeali1, etc.

2 replies, 23 likes

Tarun Chitra: Speaking of this, come see us talk about this at ACM Advances in Financial Technologies at 8a PST/11a EST/3p UTC

1 replies, 15 likes

Guillermo Angeris: @badcryptobitch @tarunchitra @gakonst @alexhevans Oh, then yay! Main papers for DeFi are: An analysis of Uniswap markets: (essentially why Uniswap "works") CFMMs (where the original term comes from): LP returns in constant mean markets: and ...

1 replies, 10 likes

HEX 2020: Wow! Uniwap is amazing!

0 replies, 9 likes

Guillermo Angeris: Quite happy with how this rewrite came out. (Pretty much fully rewritten!) I really would highly recommend a read if you’re interested in DeFi at all; there’s some beautiful (and unexpected!) connections to convex analysis underpinning this AMM zoo :)

1 replies, 9 likes

Guillermo Angeris: Go check out the paper @tarunchitra and I have just finished writing, generalizing the family of known automated market makers! It also has some very simple ways of computing LP returns, for, e.g. @UniswapExchange or @BalancerLabs !

1 replies, 8 likes

Guillermo Angeris: Probably my favorite part about this paper is that the term “CFMM” became a meme and few have any idea that the term didn’t exist before then cc: @tarunchitra

0 replies, 7 likes

Tina.ThereIsNoAlternative: Really frustrated with certain super well funded project not getting back to developer questions in 3 FUCKING DAYS! Everyone is busy and COVID is NO EXCUSE. And we chose to TRUST and RELY on these primitives?!

1 replies, 7 likes

Tarun Chitra: @cmsholdings You can show that they’re volatility harvesting strategies and always short vol, c.f.,

1 replies, 4 likes

キノ丂ズム刀イ乇丂: Tangential take that highlights how AMMs are disrupting ETFs, by making them "arbitrageable" Those who disregard AMMs as purely capital inefficient competition to trad. MMs are suffering from lack of imagination.

1 replies, 3 likes

Tarun Chitra: @andrewmargetts Constant Function Market Maker --- the generalization of Uniswap, Curve, and Balancer to generic AMMs

1 replies, 3 likes

Matt Shams(Brrrr) 🎯: this is an absolute gem for understanding the DNA on autonomous markets for #DeFi by @tarunchitra

0 replies, 1 likes

Celia Wan: committing myself to read this today because it got brought up so frequently in the past two days. @tarunchitra

0 replies, 1 likes


Found on Apr 12 2020 at

PDF content of a computer science paper: Improved Price Oracles: Constant Function Market Makers