A look at the evolution of on-chain market making

Quick take

• After massive inflows last summer, liquidity in on-chain DEX’s has struggled to sustain further growth. 
• AMM’s are currently in a state where passive strategies aren’t sufficiently profitable to attract additional liquidity, and on-chain bandwidth remains prohibitive for traditional order books.  
• The space between basic AMM’s and central limit order books remains largely unexplored and could contain an avenue to further enhance on-chain liquidity.

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