AMMs are the algorithmic pillars that supportSupport Un niveau de prix où l'on s'attend à ce que la pression d'achat soit suffisamment forte pour empêcher d'autres baisses de prix. the infrastructure of decentralized exchanges (DEXs) in the decentralized finance (DeFiDeFi Les services DeFi utilisent des smart contracts, des protocoles décentralisés et des jetons pour offrir une gamme de services financiers qui peuvent parfois remplacer ceux proposés par les banques, tels que le prêt/emprunt, la gestion d'actifs, l'assurance ou l'échange d'actifs.) universe.
These automated mechanisms revolutionize how assets are traded online by providing an innovative alternative to traditional order bookOrder Book Un carnet affichant les ordres d'achat (offres) et de vente (demandes) sur un marché. models, eliminating the need for centralized actors to facilitate trades.
In traditional finance, marketplaces are managed by private entities, such as the New York Stock Exchange (NYSE). The NYSE allows participants to trade on the secondary marketMarket Lieu où les actifs sont achetés et vendus. during defined trading hours. LiquidityLiquidity La facilité avec laquelle un actif peut être acheté ou vendu sans que son prix n'en soit affecté. is provided by supply and demand, along with the work of market specialists (Designated Market Makers) and floor brokers.
What is an AMMAMM Un algorithme utilisé dans les plateformes de négociation décentralisées (DEX) pour fournir de la liquidité à l'aide de pools. Les fournisseurs de liquidités déposent dans ces pools et reçoivent une part des frais générés par les transactions. L'algorithme détermine le prix de l'actif en fonction de l'offre et de la demande dans le pool.?
An AMM is a protocol that enables the automatic and decentralized exchange of digital assets. AMMs use mathematical algorithms and predefined liquidity pools to facilitate trades.
Since the market is governed by autonomous algorithms and intermittent liquidity provision, there are no specific trading hours, and trading can occur at any time. Without a centralized authority to approve or disapprove trades or liquidity provision, anyone can interact with the platform.
This also means that no professionals are required to ensure the proper guarantee and liquidity of pairs, so trading without checking the following two points can be risky:
- Verify Tokens: Fraudulent tokenToken Un actif numérique émis sur une blockchain qui représente divers services publics, droits ou titres. creators may produce fake tokens with similar names to deceive buyers. It’s essential to check the token’s contract addressAddress Chaîne de caractères unique qui identifie une entité ou un compte sur un réseau blockchain, permettant l'envoi et la réception de crypto-monnaies. (official link from the project’s site or Twitter, and verify consistency with displayed liquidity and market capMarket Cap La valeur totale d'une crypto-monnaie, calculée en multipliant son prix par son offre en circulation.).
- Liquidity Concerns: For lesser-known tokens, liquidity might be low (low volume, less attractive for liquidity providers), and buying or selling a significant amount could result in substantial slippageSlippage La différence entre le prix attendu d'une transaction et le prix réel auquel elle est exécutée, qui se produit souvent pendant des périodes de forte volatilité ou de faible liquidité. (the actual trading price may differ from the indicated price due to inadequate counterparty supply at the desired price).
Liquidity Pools
Liquidity pools are central to AMMs. They consist of pairs of assets deposited by users, known as liquidity providers (LPs). In exchange for their deposits, LPs earn transaction fees generated from the trades occurring in the pool.
For a detailed understanding of liquidity provision, see articles on stakingStaking L'acte de participer à un réseau Proof of Stake en bloquant des jetons comme garantie pour valider les transactions et sécuriser le réseau. and lendingLending Le fait de prêter des crypto-monnaies contre des intérêts. and impermanent loss.
Algorithmic Models
Several algorithmic models are used by AMMs, with the most popular being the Constant Product Market MakerMaker Une entité qui fournit de la liquidité à un marché en plaçant des ordres limités. (CPMM) model, based on the formula: x⋅y=kx \cdot y = kx⋅y=k where xxx and yyy are the quantities of the two assets in the pool, and kkk is a constant.
Other algorithmic models include:
- Constant Sum Market Maker (CSMM)
- Constant Mean Market Maker (CMMM), used by Balancer
- Advanced Hybrid Constant Function Market Maker (CFMM), used by PancakeSwap
- Dynamic Automated Market Maker (DAMM)
Notable AMMs include Uniswap, PancakeSwap, Osmosis, and CurveDAO.
Advantages and Challenges
AMMs offer permanent liquidity, facilitate market access and participation, and reduce transaction costs and delays. However, they also present challenges such as impermanent loss, where liquidity providers may see the value of their deposited assets decrease due to price fluctuations.
To address this issue, some DEXs have had to reinvent themselves. For instance, Uniswap, Ethereum’s leading DEXDEX Plate-forme d'échange décentralisée sans autorité centrale, qui utilise souvent des AMM pour permettre les transactions., introduced a new version:
- Uniswap V3: LPs can concentrate their liquidity within specific price ranges, unlike previous versions where liquidity was distributed across the entire price curve. This allows LPs to provide liquidity only in the price ranges where they expect most trades to occur, thereby increasing capital efficiency.
Example: Suppose an LP wants to provide liquidity for an ETH/DAI pair. Instead of spreading their capital across the entire price curve, they can concentrate it between 1,000 and 2,000 DAI per ETH, thereby maximizing returns if most trades happen within this rangeRange La différence entre le prix le plus élevé et le prix le plus bas d'un actif au cours d'une période donnée.. - Flexible Fees: Uniswap V3 introduces flexible fees, allowing LPs to choose from three different fee tiers to compensate for the risks associated with each trading pair. This enables LPs to tailor their strategies according to the expected volatilityVolatility Le degré de variation du prix d'un actif dans le temps. of the trading pair.
- Enhanced Oracles: Uniswap V3’s oracles are optimized to calculate the time-weighted average price (TWAP) more efficiently and over longer periods, facilitating integration and use by other DeFi protocols.
- Non-Fungible Liquidity: In Uniswap V3, liquidity positions are represented by non-fungible tokens (NFTs), reflecting the unique nature of each liquidity position due to the ability to specify price ranges.
Conclusion
AMMs represent a major technological advancement in DeFi by automating and democratizing access to digital assetAsset Tout actif numérique, y compris les crypto-monnaies. exchanges. By understanding the mechanisms and algorithms behind them, users and investors can take advantage of several opportunities:
- Buy or sell tokens without waiting for them to be listed on a centralized exchange, and without needing the exchange’s approval. Bots (such as Unibot, Maestro) are even available for investing at new pair listings.
- Implement farming strategies and grow the cryptocurrencies held.
