A1898
Title: Decentralized investment management with constant function market makers
Authors: Marcus Wunsch - ZHAW Zurich University of Applied Sciences (Switzerland) [presenting]
Abstract: Automated market makers (AMM) are smart contracts that enable the non-custodial exchange of digital assets within a liquidity pool. They are one of the most important innovations in decentralized finance. Among AMMs, so-called constant function market makers (CFMM) have recently been investigated using tools from mathematical finance. The properties of the wealth process of CFMM liquidity providers are studied, including the adverse selection risk they are exposed to (impermanent loss), and these are compared to strategies based on constant portfolio weights.
