Bancor Challenge 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 applied in 2017.
Main Purpose:
Keep liquidity close to equilibrium to facilitate value stability.
Pricing Mechanism:
Bids and asks regulate primarily based on market exercise.
Benefits:
Efficient for value discovery, notably for brand new and lengthy tail belongings.
Disadvantages: The buying and selling technique it represents is just not very worthwhile, and more often than not it loses cash for individuals who subscribe to it.
