---
title: Decentralised Finance and Market Making
url: https://www.ml-quant.com/papers/ssrn/4897143/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-09-26
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: SSRN 4897143
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4897143
featured: 2024-07-17
citations: unknown
topic: Crypto & DeFi
---


# Decentralised Finance and Market Making

The study develops optimal strategies for large order traders and statistical arbitrages in automated market makers with concentrated liquidity.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4897143
- Identifier: SSRN 4897143
- Released: 2024-07-12
- First featured: Quant Letter No. 57 (2024-07-17): https://www.ml-quant.com/issues/2024-07-17/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Crypto & DeFi

## Related

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- [Decentralised Finance and Automated Market Making: Predictable Loss and Optimal Liquidity Provision](https://www.ml-quant.com/papers/arxiv/2309.08431/): The study outlines the wealth dynamics of strategic liquidity providers in constant product markets, proposes an optimal liquidity provision strategy, and uses Uniswap v3 data to show its effectiveness.
- [Axioms for Automated Market Makers: A Mathematical Framework in FinTech and Decentralized Finance](https://www.ml-quant.com/papers/arxiv/2210.01227/): Mathematical Framework: The research introduces a new framework for Automated Market Makers, suggesting a unique fee structure and a novel AMM that reduces divergence loss.
- [Learning from DeFi: Would Automated Market Makers Improve Equity Trading?](https://www.ml-quant.com/papers/ssrn/4531670/): The study suggests that optimally designed automated market makers could potentially save U.S. investors billions in transaction costs each year.
- [Decentralised Finance and Automated Market Making: Execution and Speculation](https://www.ml-quant.com/papers/ssrn/4144743/): The study investigates automated market makers, particularly constant product market makers, and develops two optimal trading strategies using stochastic optimal control tools, as demonstrated with Uniswap v3 data.
- [DeFi Arbitrage](https://www.ml-quant.com/papers/ssrn/4959073/): A study proposes risk-neutral pricing and hedging formulas for liquidity tokens in the constant product market maker (CPMM), suggesting new Automated Market Maker (AMM) designs.
