flâneur

Path to building perfect markets - Pt. 1

thenoneconomist.substack.com · 4,101 words · saved by 1 readers

For those interested in designing markets - choosing amongst Orderbook, AMM, Batch Auction is a matter of identifying user needs and fitting in. User needs are - volume needs, immediacy, price sensitivity, and privacy. Orderbooks are well suited for traders trading low to mid volume, wanting quick execution, with a low to medium price sensitivity for their execution prices. They require intermediaries to support high volume high price sensitivity use cases. AMMs, as of now, can only support low to mid volume, not immediate, low price sensitivity use cases. However, improvements in technology wrt block time and MEV mitigation can make it better for immediate, micro volume, and mid price sensitive use cases. Frequent Batch Auction1 have carved out their niche of high volume, no immediacy, high price sensitivity use cases. There is no such thing as perfect privacy (It’s math!). There are different forms of privacy depending on what information and when an information might be revealed. Th

They all have different uses - some overlapping For those interested in designing markets - choosing amongst Orderbook, AMM, Batch Auction is a matter of identifying user needs and fitting in. User needs are - volume needs, immediacy, price sensitivity, and privacy. Orderbooks are well suited for traders trading low to mid volume, wanting quick execution, with a low to medium price sensitivity for their execution prices. They require intermediaries to support high volume high price sensitivity use cases. AMMs, as of now, can only support low to mid volume, not immediate, low price…

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