Brief History of Automated Market Makers

This post is meant to provide an overview of the Automated Market Maker (AMM) space. First by reviewing some of the history and various designs. Following will be a walkthrough of using AMM pricing functions for other applications than spot trading leading to interesting dynamics and the evolving relationship between onchain orderbooks and AMMs.

Everything written in the post is outlined in the following repository

A Little History

While the existence of AMMs truly took off with Uniswap there is quite a history to it.

Sep 2, 2015: Martin Köppelmann: Gnosis Market Maker Orderbook

Sep 26, 2016: Nick Johnson: Euler

Oct 3, 2016: Vitalik: Let's run on-chain decentralized exchanges the way we run prediction markets

Mar 6, 2017: Alan Lu: Building a Decentralized Exchange in Ethereum

Mar 2, 2018: Vitalik: x*y=k market makers


Various AMM Launches