Within this talk, we introduce an axiomatic framework for Automated Market Makers (AMMs). By imposing reasonable axioms on the underlying utility function, we are able to characterize the properties of the swap size of the assets and of the resulting pricing oracle. We will analyze many existing AMMs and show that the vast majority of them satisfy our axioms. We will also consider the question of fees and divergence loss. In doing so, we will propose a new fee structure so as to make the AMM indifferent to transaction splitting. Finally, we will propose a novel AMM that has nice analytical properties and provides a large range over which there is no divergence loss.

This talk is free and open to all interested participants.

Location: Leibniz Universität Hannover, Welfengarten 1, 30167 Hannover, room 1101 - B305

Speaker: Zachary Feinstein, Stevens Institute of Technology