%0 Conference Proceedings
%T A Theory of Automated Market Makers in DeFi
%+ Università degli Studi di Cagliari = University of Cagliari (UniCa)
%+ Danmarks Tekniske Universitet = Technical University of Denmark (DTU)
%A Bartoletti, Massimo
%A Chiang, James, Hsin-Yu
%A Lluch-Lafuente, Alberto
%Z Part 3: Large-Scale Decentalised Systems
%< avec comité de lecture
%( Lecture Notes in Computer Science
%B 23th International Conference on Coordination Languages and Models (COORDINATION)
%C Valletta, Malta
%Y Ferruccio Damiani
%Y Ornela Dardha
%I Springer International Publishing
%3 Coordination Models and Languages
%V LNCS-12717
%P 168-187
%8 2021-06-14
%D 2021
%R 10.1007/978-3-030-78142-2_11
%Z Computer Science [cs]
%Z Computer Science [cs]/Networking and Internet Architecture [cs.NI]Conference papers
%X Automated market makers (AMMs) are one of the most prominent decentralized finance (DeFi) applications. They allow users to exchange units of different types of crypto-assets, without the need to find a counter-party. There are several implementations and models for AMMs, featuring a variety of sophisticated economic mechanisms. We present a theory of AMMs. The core of our theory is an abstract operational model of the interactions between users and AMMs, which can be concretised by instantiating the economic mechanisms. We exploit our theory to formally prove a set of fundamental properties of AMMs, characterizing both structural and economic aspects. We do this by abstracting from the actual economic mechanisms used in implementations and identifying sufficient conditions which ensure the relevant properties. Notably, we devise a general solution to the arbitrage problem, the main game-theoretic foundation behind the economic mechanisms of AMMs.
%G English
%Z TC 6
%Z WG 6.1
%2 https://inria.hal.science/hal-03387829/document
%2 https://inria.hal.science/hal-03387829/file/509400_1_En_11_Chapter.pdf
%L hal-03387829
%U https://inria.hal.science/hal-03387829
%~ IFIP-LNCS
%~ IFIP
%~ IFIP-TC
%~ IFIP-WG
%~ IFIP-TC6
%~ IFIP-WG6-1
%~ IFIP-COORDINATION
%~ IFIP-LNCS-12717