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by yieldcrv 322 days ago
I love automated market making and the varying research there

I think this is successful in its goals

Liquidity providing on concentrated liquidity pools is something I would like to see in the high volume US equities market

But will realistically only exist on tokenized platforms that trade their surrogates

It’s extremely lucrative and was only in the domain of market making firms before this technology
1 comments
TheCowboy 322 days ago
One problem with this is crypto AMM (automated market making) works best with stability and low volatility. For example, it's terrible in the context of prediction markets. Market makers get hosed due to real life, and traders (me) can profit at their expense. It's a big part of why prediction market traders encouraged Polymarket to develop orderbooks. And if crypto is viewed as disruptive, then it's likely inducing greater volatility.

A lot of these things are lucrative until they're not. If they are inherently lucrative then that profit will diminish as people catch on.

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yieldcrv 322 days ago
Every market has a use case, and AMMs are not solving event markets, event markets tried to use AMMs and successfully pivoted to order books. I think Polymarket's implementation still has liquidity challenges, as they still have to centrally bribe people to participate. Honestly I don't like Polymarket's contract at all, but it is fast and low cost. Bribes in the solidly AMM model I think were more efficient at attracting liquidity. Slight tangent, the oracle in Polymarket is a bigger issue, people need to convince them to lower the weight of UMA.

back to what I'm a fan of: CLMMs (Concentrated Liquidity Market Maker) is a very competitive field. The level of profits depends solely on volume and amount of capital participating. You are counting on other capital getting bored and moving away, as well as volume rising. Thats the game, it will always be the game. Its already "lucrative until its not" so its not really a gotcha or that insightful for those passing by. I'm glad you have some experience with it.

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