The Decentralized Finance market has experienced exponential growth since 2020, but is still a relatively unexplored field of academic research.
This Bachelor thesis aims to contribute to the existing research on the Automated Market Makers and Decentralized Exchanges. It seeks to demonstrate their evolution by comparing the differences between various types of Decentralized Exchanges and evaluating the new feature of Uniswap v3 with the possibility of concentrated liquidity to achieve better liquidity efficiency.
The thesis shows that the Automated Market Maker model is promising on the one hand, as it potentially solves the existing liquidity inefficiencies and improves transparency. However, on the other hand, it is still uncertain from a regulatory and scalability perspective.
Table of Contents
1 Introduction
2 Theory
2.1 Literature Review
2.2 Mechanism of Decentralized Exchanges
2.3 Comparison between Centralized and Decentralized Exchanges
3 Automated Market Makers
3.1 Constant Product Market Maker: Uniswap v2
3.2 Concentrated Liquidity: Uniswap v3
3.3 Challenges and Future Potential of Automated Market Makers
4 Conclusion
Bibliography
- Quote paper
- Anonym (Author), 2022, The Evolution of Automated Market Makers and Decentralized Exchanges, Munich, GRIN Verlag, https://www.grin.com/document/1318760
