Food for Thought: Uniswap's V3 upgrade, the future of Automated Market Makers, and the financial compression algorithm
Hi Fintech Architects,
Automated Market Makers are evolving.
This is not a deep dive, but a heads up. For those of you interested in really understanding things in more detail, it is just a starting point.
To rewind, AMMs are the solution for exchange and trading on Ethereum. For comparison, a regular exchange builds out an orderbook of buyers and sellers. The buyers bid at X price, and the sellers ask at Y price. Somewhere in the middle, they meet and there’s a transaction. Here’s a screen from Coinbase Pro showing an orderbook for those buyers and sellers.
… and here it is visualized as a tug of war between capital.