A theory of Automated Market Makers in DeFi

Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of crypto-tokens, without the need to find a counter-party. There are several implementations and models for AMMs, featuring a variety of sophisticated ec...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Logical methods in computer science Jg. 18, Issue 4
Hauptverfasser: Bartoletti, Massimo, Chiang, James Hsin-yu, Lluch-Lafuente, Alberto
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Logical Methods in Computer Science e.V 01.01.2022
Schlagworte:
68n30
computer science - computer science and game theory
computer science - formal languages and automata theory
i.6.4
ISSN:1860-5974, 1860-5974
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
Abstract Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of crypto-tokens, without the need to find a counter-party. There are several implementations and models for AMMs, featuring a variety of sophisticated economic mechanisms. We present a theory of AMMs. The core of our theory is an abstract operational model of the interactions between users and AMMs, which can be concretised by instantiating the economic mechanisms. We exploit our theory to formally prove a set of fundamental properties of AMMs, characterizing both structural and economic aspects. We do this by abstracting from the actual economic mechanisms used in implementations, and identifying sufficient conditions which ensure the relevant properties. Notably, we devise a general solution to the arbitrage problem, the main game-theoretic foundation behind the economic mechanisms of AMMs.
AbstractList Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of crypto-tokens, without the need to find a counter-party. There are several implementations and models for AMMs, featuring a variety of sophisticated economic mechanisms. We present a theory of AMMs. The core of our theory is an abstract operational model of the interactions between users and AMMs, which can be concretised by instantiating the economic mechanisms. We exploit our theory to formally prove a set of fundamental properties of AMMs, characterizing both structural and economic aspects. We do this by abstracting from the actual economic mechanisms used in implementations, and identifying sufficient conditions which ensure the relevant properties. Notably, we devise a general solution to the arbitrage problem, the main game-theoretic foundation behind the economic mechanisms of AMMs.
Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of crypto-tokens, without the need to find a counter-party. There are several implementations and models for AMMs, featuring a variety of sophisticated economic mechanisms. We present a theory of AMMs. The core of our theory is an abstract operational model of the interactions between users and AMMs, which can be concretised by instantiating the economic mechanisms. We exploit our theory to formally prove a set of fundamental properties of AMMs, characterizing both structural and economic aspects. We do this by abstracting from the actual economic mechanisms used in implementations, and identifying sufficient conditions which ensure the relevant properties. Notably, we devise a general solution to the arbitrage problem, the main game-theoretic foundation behind the economic mechanisms of AMMs.
Author Lluch-Lafuente, Alberto
Chiang, James Hsin-yu
Bartoletti, Massimo
Author_xml – sequence: 1
  givenname: Massimo
  orcidid: 0000-0003-3796-9774
  surname: Bartoletti
  fullname: Bartoletti, Massimo
– sequence: 2
  givenname: James Hsin-yu
  orcidid: 0000-0002-5126-9494
  surname: Chiang
  fullname: Chiang, James Hsin-yu
– sequence: 3
  givenname: Alberto
  orcidid: 0000-0001-7405-0818
  surname: Lluch-Lafuente
  fullname: Lluch-Lafuente, Alberto
BookMark eNp9kE9LAzEQxYNUsNZ-AU97VGQ1mWSzWW-lWi1UvOg5zCZZTf9sJBsP_fZuWwXx4BzmDQO_x-OdkkEbWkfIOaPXQkKlbtYb0-VMXYhbBpdAAY7IkClJ86IqxeDXfULGXbek_XDOFMghuZpk6d2FuM1Ck00-U9hgcjZ7wrhyqZeVi13m2-zOzfwZOW5w3bnxt47I6-z-ZfqYL54f5tPJIje8KFPOCsHQSsCidAiAFZeKWQtWgCqNEZLutil4Q2vgoCRzlZBcqZo6J5XhIzI_-NqAS_0R_QbjVgf0ev8I8U1jTN6snZYVlIIWQFFUgtWgWC2pxRIK65AZ0Xupg5eJoeuia7TxCZMPbYro15pRve9Q7zrUTGmhGehdhz0Kf9CfKP9AX49OdJw
CitedBy_id crossref_primary_10_1007_s42521_023_00088_8
crossref_primary_10_21202_2782_2923_2024_1_88_104
crossref_primary_10_3389_fbloc_2024_1455070
crossref_primary_10_1016_j_bcra_2025_100361
crossref_primary_10_3390_jrfm16050259
ContentType Journal Article
DBID AAYXX
CITATION
DOA
DOI 10.46298/lmcs-18(4:12)2022
DatabaseName CrossRef
DOAJ Directory of Open Access Journals
DatabaseTitle CrossRef
DatabaseTitleList
CrossRef
Database_xml – sequence: 1
  dbid: DOA
  name: DOAJ Directory of Open Access Journals
  url: https://www.doaj.org/
  sourceTypes: Open Website
DeliveryMethod fulltext_linktorsrc
Discipline Computer Science
EISSN 1860-5974
ExternalDocumentID oai_doaj_org_article_692740520a4941b281b60da725dea1c4
10_46298_lmcs_18_4_12_2022
GroupedDBID .4S
.DC
29L
2WC
5GY
5VS
AAFWJ
AAYXX
ADBBV
ADMLS
ADQAK
AENEX
AFPKN
ALMA_UNASSIGNED_HOLDINGS
ARCSS
BCNDV
CITATION
EBS
EJD
FRP
GROUPED_DOAJ
J9A
KQ8
MK~
ML~
M~E
OK1
OVT
P2P
TR2
TUS
XSB
ID FETCH-LOGICAL-c357t-1541ad62a57ea22a93681dd2d4287cc4607cc4c53f0b232861e946388b0ee68c3
IEDL.DBID DOA
ISICitedReferencesCount 7
ISICitedReferencesURI http://www.webofscience.com/api/gateway?GWVersion=2&SrcApp=Summon&SrcAuth=ProQuest&DestLinkType=CitingArticles&DestApp=WOS_CPL&KeyUT=000902167700001&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D
ISSN 1860-5974
IngestDate Fri Oct 03 12:54:03 EDT 2025
Sat Nov 29 06:21:52 EST 2025
Tue Nov 18 22:38:30 EST 2025
IsDoiOpenAccess true
IsOpenAccess true
IsPeerReviewed true
IsScholarly true
Language English
License https://creativecommons.org/licenses/by/4.0
LinkModel DirectLink
MergedId FETCHMERGED-LOGICAL-c357t-1541ad62a57ea22a93681dd2d4287cc4607cc4c53f0b232861e946388b0ee68c3
ORCID 0000-0002-5126-9494
0000-0003-3796-9774
0000-0001-7405-0818
OpenAccessLink https://doaj.org/article/692740520a4941b281b60da725dea1c4
ParticipantIDs doaj_primary_oai_doaj_org_article_692740520a4941b281b60da725dea1c4
crossref_citationtrail_10_46298_lmcs_18_4_12_2022
crossref_primary_10_46298_lmcs_18_4_12_2022
PublicationCentury 2000
PublicationDate 2022-01-01
PublicationDateYYYYMMDD 2022-01-01
PublicationDate_xml – month: 01
  year: 2022
  text: 2022-01-01
  day: 01
PublicationDecade 2020
PublicationTitle Logical methods in computer science
PublicationYear 2022
Publisher Logical Methods in Computer Science e.V
Publisher_xml – name: Logical Methods in Computer Science e.V
SSID ssj0000331826
Score 2.3755407
Snippet Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of...
Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. AMMs allow users to trade different types of...
SourceID doaj
crossref
SourceType Open Website
Enrichment Source
Index Database
SubjectTerms 68n30
computer science - computer science and game theory
computer science - formal languages and automata theory
i.6.4
Title A theory of Automated Market Makers in DeFi
URI https://doaj.org/article/692740520a4941b281b60da725dea1c4
Volume 18, Issue 4
WOSCitedRecordID wos000902167700001&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D
hasFullText 1
inHoldings 1
isFullTextHit
isPrint
journalDatabaseRights – providerCode: PRVAON
  databaseName: DOAJ Directory of Open Access Journals
  customDbUrl:
  eissn: 1860-5974
  dateEnd: 99991231
  omitProxy: false
  ssIdentifier: ssj0000331826
  issn: 1860-5974
  databaseCode: DOA
  dateStart: 20040101
  isFulltext: true
  titleUrlDefault: https://www.doaj.org/
  providerName: Directory of Open Access Journals
– providerCode: PRVHPJ
  databaseName: ROAD: Directory of Open Access Scholarly Resources
  customDbUrl:
  eissn: 1860-5974
  dateEnd: 99991231
  omitProxy: false
  ssIdentifier: ssj0000331826
  issn: 1860-5974
  databaseCode: M~E
  dateStart: 20040101
  isFulltext: true
  titleUrlDefault: https://road.issn.org
  providerName: ISSN International Centre
link http://cvtisr.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwrV3PS8MwGA0yPHjxtzh_kYMHZYQlaZom3qZueHDDg8JuIU1SGM5Ntk7w4t9uknZjXvTiJYWSlvR9TfNeyfc-AC5lQXKjhUVZKiVilBQo10YinjkTDMUtL6K7_mM2GIjhUD6tlfoKe8Iqe-AKuDaXXjeFzRqaSUZy6mkWx1ZnNLVOExOdQD3rWRNT8RucJIE4V1kyjFMp2uM3M0dEXLEbQq-95Kc_VqI1w_64svR2wXZNCWGnGsoe2HCTfbCzLLcA69l3AFodGNMOP-G0gJ1FOfVk01nYj3nL_vDqmRwcTeC9640OwUuv-3z3gOpaB8gkaVYiz2SItpzqNHOaUi0T7pmkpTZIGmMYx6E1aVLg3JMgwYmTzM8dkWPnuDDJEWhMphN3DGDGHc-sYQVmmqUay6LA2HApBMHGYNsEZPncytRG4KEexVh5QRCxUgErRYRiilAVsGqC1uqa98oG49fetwHOVc9gYR1P-MCqOrDqr8Ce_MdNTsFWGFD1z-QMNMrZwp2DTfNRjuazi_jO-Lb_1f0GPmzCoA
linkProvider Directory of Open Access Journals
openUrl ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=A+theory+of+Automated+Market+Makers+in+DeFi&rft.jtitle=Logical+methods+in+computer+science&rft.au=Bartoletti%2C+Massimo&rft.au=Chiang%2C+James+Hsin-yu&rft.au=Lluch-Lafuente%2C+Alberto&rft.date=2022-01-01&rft.issn=1860-5974&rft.eissn=1860-5974&rft.volume=18%2C+Issue+4&rft_id=info:doi/10.46298%2Flmcs-18%284%3A12%292022&rft.externalDBID=n%2Fa&rft.externalDocID=10_46298_lmcs_18_4_12_2022
thumbnail_l http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/lc.gif&issn=1860-5974&client=summon
thumbnail_m http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/mc.gif&issn=1860-5974&client=summon
thumbnail_s http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/sc.gif&issn=1860-5974&client=summon