Uniswap founder backs AMMs over market makers
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- Uniswap founder Hayden Adams says AMMs can beat traditional market makers in some markets.
- He says lower capital costs give AMMs an advantage in low-volatility markets.
- Adams also sees AMMs as useful for smaller tokens and tokenised assets.
Uniswap founder Hayden Adams says automated market makers can outperform traditional market makers in some markets.
Adams said AMMs have an edge when trading pairs have low price volatility.
“Low volatility pairs: AMM wins easy bc it’s stable yield for people with low cost of capital that undercut professional market makers with high cost of capital,” wrote Uniswap founder Hayden Adams.
He also said AMMs can provide liquidity for highly volatile smaller tokens where other market structures may struggle.
Adams said Uniswap v4 hooks could help liquidity providers capture more value in major token markets.
Uniswap (CRYPTO:UNI) uses AMMs that let users trade through liquidity pools instead of traditional order books.
Uniswap has no publicly traded share price, so there is no stock reaction to report following Adams’ comments.
At the time of reporting, Uniswap price was $3.25.
