Bancor Venture Lead, Dr. Mark Richardson:
Conventional Automated Market Makers (AMMs), together with these with concentrated liquidity, are designed primarily to maintain liquidity near the equilibrium value.
Traditionally, these fashions have adopted the Bancor mannequin, launched in 2016 and carried out in 2017.
Major Aim:
- Keep liquidity close to equilibrium to facilitate value stability.
Pricing Mechanism:
- Bids and asks alter based mostly on market exercise.
Benefits:
- Efficient for value discovery, notably for brand spanking new and lengthy tail property.
Disadvantages: The buying and selling technique it represents isn’t very worthwhile, and more often than not it loses cash for many who subscribe to it.
