Bancor Challenge Lead, Dr. Mark Richardson:
Conventional Automated Market Makers (AMMs), together with these with concentrated liquidity, are designed primarily to maintain liquidity near the equilibrium worth.
Traditionally, these fashions have adopted the Bancor mannequin, launched in 2016 and applied in 2017.
Major Objective:
Preserve liquidity close to equilibrium to facilitate worth stability.
Pricing Mechanism:
Bids and asks modify based mostly on market exercise.
Benefits:
Efficient for worth discovery, notably for brand new and lengthy tail belongings.
Disadvantages: The buying and selling technique it represents is just not very worthwhile, and more often than not it loses cash for many who subscribe to it.
