Automated Market Makers in Cryptoeconomic Systems: A Taxonomy and Archetypes
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
| Published: |
2023
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| _version_ | 1866909546177363968 |
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| author | Kirste, Daniel Kannengießer, Niclas Lamberty, Ricky Sunyaev, Ali |
| author_facet | Kirste, Daniel Kannengießer, Niclas Lamberty, Ricky Sunyaev, Ali |
| contents | Designing automated market makers (AMMs) is crucial for decentralized token exchanges in cryptoeconomic systems. At the intersection of software engineering and economics, AMM design is complex and, if done incorrectly, can lead to financial risks and inefficiencies. We developed an AMM taxonomy for systematically comparing AMM designs and propose three AMM archetypes that meet key requirements for token issuance and exchange. This work bridges software engineering and economic perspectives, providing insights to help developers design AMMs tailored to diverse use cases and foster sustainable cryptoeconomic systems. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2309_12818 |
| institution | arXiv |
| publishDate | 2023 |
| record_format | arxiv |
| spellingShingle | Automated Market Makers in Cryptoeconomic Systems: A Taxonomy and Archetypes Kirste, Daniel Kannengießer, Niclas Lamberty, Ricky Sunyaev, Ali Trading and Market Microstructure Cryptography and Security Designing automated market makers (AMMs) is crucial for decentralized token exchanges in cryptoeconomic systems. At the intersection of software engineering and economics, AMM design is complex and, if done incorrectly, can lead to financial risks and inefficiencies. We developed an AMM taxonomy for systematically comparing AMM designs and propose three AMM archetypes that meet key requirements for token issuance and exchange. This work bridges software engineering and economic perspectives, providing insights to help developers design AMMs tailored to diverse use cases and foster sustainable cryptoeconomic systems. |
| title | Automated Market Makers in Cryptoeconomic Systems: A Taxonomy and Archetypes |
| topic | Trading and Market Microstructure Cryptography and Security |
| url | https://arxiv.org/abs/2309.12818 |