Professional Market Makers

Instead of utilizing an automated market maker, these approaches introduce a professional market maker to handle trades and are expected to execute them at market price. Generally, these approaches involve off-chain agreements on exchange rates and on-chain transaction execution.

Positives

  • Almost no increase in transaction cost.
  • No jostling

Negatives

  • Decrease in goodput
  • Delay increases
  • Decentralization decreases
  • Security in case of byzantine market makers

Methods

Abbreviations

  1. MEV : Maximal Extractable Value
  2. FairMM : Fair Market Maker
  1. FM-AMM: Function-Maximizing  Automated Market Makers
  1. DeFi: Decentralized Finance

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