This paper describes a pioneering design for Automated Market Makers called Auction-Managed AMMs. Addressing informed trader loss and uninformed trader fee revenue optimization issues, this concept allows players to bid to manage pools and dynamically adjust swap fees. The design optimizes transaction fees, benefiting liquidity providers and retail investors and potentially attracting more liquidity than traditional AMMs, thereby enhancing efficiency on DeFi platforms.
Friday, March 8, 2024