The Art of AMM
summary
Finds that top AMM pools keep large portions of liquidity idle, fragmented and locked in pools, then presents 1inch Aqua: a shared-liquidity layer that leaves assets in maker wallets, exposes virtual balances with pull/push APIs, and composes with money markets to amplify capital (example: $1k → $3k collateral → 3× leverage, plus 2× from shared liquidity; claim of huge virtual liquidity multipliers). Describes Swap VM instruction set (constant-product, flat fees, concentrated ranges, Dutch-auction), reports past Money Swap results: LP yield ×2 while arbitrage profit drops ×10, and AMMs are permissionless and composable.
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chapters (12)
- 0:00AMM capital efficiency
- 1:14Liquidity pool inefficiencies
- 4:50Shared liquidity with Aqua
- 7:39Liquidity for DeFi composability
- 10:31Capital efficiency metrics
- 11:14Toxic flow in AMMs
- 13:44Fair versus unfair volumes
- 14:05Aqua liquidity layer protocol
- 14:50Swap VM architecture
- 23:27AMMs with Swap VM instructions
- 25:36Competing with formulas
- 26:19Q&A
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