It’s been almost a year since UnixwapX’s launch - bringing offchain liquidity to the largest DEX.

What happened? The AMM continues to fill 60-80% of total volume, even substantial volume of major tokens on CEXs. 

@jhackworth and I explored why:

It’s been almost a year since UnixwapX’s launch - bringing offchain liquidity to the largest DEX.

What happened? The AMM continues to fill 60-80% of total volume, even substantial volume of major tokens on CEXs. 

@jhackworth and I explored why: https://blog.variant.fund/the-future-of-dex-trading

1. Stale prices - AMMs can sometimes quote stale, better prices when the pool doesn’t have time to adjust to the market price, set on the CEX.

2. Filler economics - fillers have various fees, in addition to CEX trading fees, which can impact their economies of scale, making it difficult to fill smaller orders.

Why is this interesting? If we’re correct, with trade execution moving up to L2s, lower gas and faster block times have the potential to mitigate both of these issues, leading to more trades potentially being filled offchain.

This is undoubtedly a centralizing force, and AMM designs will need innovation for this new execution environment to keep up with offchain fills.

Read more here:

This is undoubtedly a centralizing force, and AMM designs will need innovation for this new execution environment to keep up with offchain fills.

Read more here: https://blog.variant.fund/the-future-of-dex-trading

We explore ETH/USDC trading through the Uniswap front end. Since ETH prices are set on CEXs, and fees are much lower, theoretically most volume here should be filled offchain. That’s not the case, however, and almost ~30% of volume is filled by the AMM.

Thanks for sharing! 200 $degen 

I somehow missed uniswapX &or forgot about it.

I prev thought there would be deep liquidity on AMMs and orderbook DEXs with limit orders built on top. Hence, liquidity on AMMs would become more passive, less used, less profitable over time.

It seems Dex aggregators & UniswapX skipp onchain orderbooks, onchain limit orders for intent systems and RFQ are directly filled by  market makers.

Do you think Uni v4 hooks will make a difference due to different execution? Will orderbook DEXs & limit orders become bigger and potentially impact this in the future the % that is routed to the AMM?