Minter 2: On-Chain Automated Market Maker with Order Book

Minter App

Automated Market Maker: Pros and Cons

The Automated Market Maker (AMM) algorithm was first proposed by Vitalik Buterin on October 3, 2016. Today, it is used in the largest DeFi projects such as Uniswap ($5B in liquidity, $1B in daily trading volume).

BTC/USDT order “book”
Change in the price of token A in an AMM pool depending on the quantity bought
  1. AMM pools aren’t suited for exchanging stablecoins, for example, USDT for USDC. The floating exchange rate means a high probability of getting an unpleasant rate in the case of large amounts
  2. Liquidity is limited at low spreads

On-Chain AMM with Order Book

Automated Market Maker with Order Book (AMMOB) is the next stage in the evolution of DeFi protocols. Apart from regular AMM pools, one can create fixed-price buy and sell orders.

  1. AMMOB pools are suitable for exchanging stablecoins, for example, USDT for USDC. One will have an opportunity to create an order to buy $1,000,000 worth of USDT for USDC at 1% below the market and later sell it at 1% above
  2. An AMMOB is more liquid than a traditional AMM pool: in some areas, the price curve becomes a straight line
  • The buyer places an order to buy BTC at $49,000
  • The seller wants to sell 10 BTC
  • Some of this amount is sold using the regular AMM algorithm
  • As soon as the in-pool price coincides with the one fixed in the order, there’s a sale at the pre-set price
  • The amount that remains after the order has been filled is sold using the regular AMM algorithm once again
Change in the price observed in an AMMOB pool
  • $0.01 for canceling
  • $0.03 for an executed market order
  • 0.2% of the volume filled goes into the liquidity pool

Minter Hub

Minter Hub is a decentralized bridge interconnecting Minter, Ethereum, and Binance Smart Chain. In Minter 2, you’ll be able to store, transfer, and exchange most of the major digital assets (e.g., BTC, ETH, BNB, USDC) with its help.

Opportunities Opened up by Minter 2 + Minter Hub

How do automated market makers, such as Uniswap or Pancake, that facilitate the exchange of tokens on blockchains differ from the one Minter 2 has built in? Ours wins in terms of speed (blocks are final in five seconds), transaction fees ($0.03 per trade), and throughput (hundreds of swaps per second). That is just a few features that have been implemented already, while Minter 2’s AMM can be integrated into vital processes using even more efficient methods. For instance, fees can be expressed in U.S. dollars for simplicity but paid in any token of your choice.

Minter App

Math of Deals

To calculate the number of tokens that will trigger the execution of a limit order, let’s first define these:

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Supporting development and adoption of Minter, a digital assets marketplace powered by a fast blockchain. Other social media: minter.org/#follow