On May 5, Uniswap v3 will launch on the L1 Ethereum mainnet, with an L2 deployment on Optimism set to follow shortly after.
For more research summaries and discussion about Automated Market Makers:
An Analysis of Uniswap Markets, summarized by lead SCRF researcher Vishesh Choudhry, was written in the early days of Uniswap and outlines how Constant Product Markets (the core of Uniswap) can be represented by relatively simple and elegant convex equations.
SCRF researcher Trent Davis summarizes Why Stake When You Can Borrow? which looks at how staking derivatives affects network security for Proof of Stake and Decentralized Finance. An interesting discussion about the risks involved with collateral swapping, capital flight, AAVE’s June 2020 v2 whitepaper, deflationary mechanisms such as Ethereum’s EIP-1559 proposal and the intersection between financialization and network security follows.
Davis also summarizes Automated Market Makers for Decentralized Finance which takes a look at circle/ellipse-based cost functions and considers whether they’d be a better substitute for Automated Market Makers than currently used cost functions, which are vulnerable to front-running attacks and may not abide by the principles of supply and demand.
SCRF researcher Barry Gitarts sketches out some of the unsolved issues involving Derivative AMMs, and proposes a solution for derivatives trading that involves using an oracle to observe the state of a liquidity pool, and compute the pool’s delta (the correlation between price change with the underlying and derivative asset). To read on in Issues in Derivative Automated Market Makers.