A Surplus Capturing AMM study funded by the CoW Grants Program is out. 👏👏
A large fraction of DeFi relies on liquidity pools, yet LP's are poorly compensated. The study examines this problem and how to properly reward them.
forum.cow.fi/t/surplus-capturing-amm-study-results/1650
The reason is that liquidity providers trade against agents (arbitrageurs, speculators) who are better informed about the value of the underlying assets, and hence are often on the “bad side” of the trade.
In the past, price oracles have been proposed as a remedy to this problem, however, this research note proposes another solution: CoW Protocol's uniform price vector.
Why did we fund this report?
Because it addresses a very important problem, and it shows that the CoW Protocol uniform price vector is a “public good” that can be used in other settings.
The goal of the CoW Grants Program is to support projects that promote CoW Swap's mission and benefit the wider CoW Swap ecosystem. We fund projects in the areas of tooling, community, MEV research, and more!
Learn more about the CoW Grants Program at grants.cow.fi/
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