Bancor Venture Lead, Dr. Mark Richardson:
Conventional Automated Market Makers (AMMs), together with these with concentrated liquidity, are designed primarily to maintain liquidity near the equilibrium value.
Traditionally, these fashions have adopted the Bancor mannequin, launched in 2016 and carried out in 2017.
Main Aim:
Keep liquidity close to equilibrium to facilitate value stability.
Pricing Mechanism:
Bids and asks modify based mostly on market exercise.
Benefits:
Efficient for value discovery, significantly for brand new and lengthy tail belongings.
Disadvantages: The buying and selling technique it represents just isn’t very worthwhile, and more often than not it loses cash for individuals who subscribe to it.
