Integrating AMMs w/Orderbooks
AMMs remain one of the great innovations of the crypto market and have enabled trading in a whole range of otherwise illiquid assets unsuited to typical market models. These mechanisms are also well suited to the realities of the blockchain trilemma. Integrating AMMs into Vertex’s orderbooks would have a number of benefits:
Deeper Liquidity - Enabling non-technical users to provide liquidity allows them to capture market making yields whilst at the same time creating deeper liquidity for price takers. A win-win.
Alternative to orderbook - This enables further decentralization by providing a backstop to orderbook liquidity. In the event that market liquidity dries an AMM allows for backstop liquidity to professional market makers, and allows price discovery to happen in an efficient and orderly fashion.
Support for illiquid assets - AMMs are ideal price discovery mechanisms for illiquid assets. It would allow Vertex to enable a range of long tail assets whilst retaining the flexibility of limit orders for those who seek it. Such a hybrid model would smooth the transition of smaller projects to becoming larger liquidity markets as they garner market maker support. It would also help with building liquidity ahead of CEX listings.