DEX, as the battle continues, which AMM will win?

AMM comparison

8 min readNov 3, 2020


An overview of emerging AMM solutions

As the DeFi market is cooling off, some DeFi products that have withstand the test are starting to stand out. The rapid growth ofUniswap makes the crypto world have to face up to this giant. Driven by Uniswap, AMM (automated market maker) has become the most successful DEX (decentralized trading platform) solution in the DeFi sector.

Currently, AMM products have become the mainstream of all kinds of DEX, accounting for more than 90% of the decentralized trading market. With the influx of a large number of users, DEX products will be further optimized, and more and more competitors will enter the market.

Just as SushiSwap wants to enter DEX, from SushiSwap taking up Uniswap’s liquidity to Uniswap issuing its own token, it is difficult to say whether SushiSwap copied Uniswap or Uniswap was inspired by SushiSwap to issue UNI.

However, the AMM market has never stopped innovating. Various start-up teams have been exploring all aspects of Uniswap, and there are still quite a few gems remain untapped, such as DODO, CoFiX, SashimiSwap, OneSwap and DeFi Swap.

These projects have come up with their own mining ideas. Let’s take a look.

First, have a look at the comparison of these AMM products in the table below.

DODO (Innovation Index: 🌟🌟🌟🌟, Utility Index: 🌟🌟)

DODO (DODO), a Chinese project, has recently become a popular DEX and has been recognized by many institutions and professionals in the industry.

As we all know, the token price on Uniswap is determined by the quantity ratio of the two tokens in the trading pair, which is limited by the constant product formula. Many of the fork projects of Uniswap have made improvements on this basis. However, DODO’s protocol has completely upended this logic and brought a set of new ideas to the DeFi field.

DODO supports unilateral fund market making. That is to say, LP does not need to provide two kinds of token for a trading pair. Instead, they can start to earn income by increasing the liquidity of the fund pool with any single type of asset. However, this is only the tip of the iceberg. DODO calls its new market making method PMM, that is, proactive market maker.

The mathematical principle of PMM is much more complicated than that of Uniswap. First of all, the price of any token in a trading pair has nothing to do with the quantity of another token but has everything to do with the price of the Oracle from Chainlink and the amount of that token. This solves the problem of trading slippage.

Secondly, the token price formula is a common version of the constant product formula. The most important feature is that even if the token amount decreases or increases much more than that at normal time, the token price will not change much, that’s why DODO says its trading curve is smoother.

However, even if the token price is more stable, as the token amount decreases, the token price will increase according to the formula. At this point, an arbitrageur will sell the tokenn and bring the amount back to normal.

Moreover, the DODO team claims that they have virtually eliminated the impermanent loss. This is because when LP adds liquidity, as long as a token is added, the system returns only the LP token that marks the token (DODO calls it capital) , not the trading pair. When users want to redeem the liquidity, the logic of contract implementation is completely different from that of Uniswap.

While Uniswap needs to consider the ratio of the two tokens, DODO doesn’t have this problem, the token amount at the time of withdrawal will still be the same as at the time of deposit. In an ideal scenario, the token price is always at normal level (i. e. the feed price of the Oracle). As a result, the token value at the time of deposit is the same as at the time of withdrawal.

However, the DODO protocol is not perfect. Due to the real-time synchronization of transactions on the chain, the data provided by Chainlink is different from the reality, and LP providers will suffer some losses. DODO thought that the price deviation would let arbitrageurs in, but in fact, the rapid changes in the market make arbitrageurs have no room for arbitrage. In other words, with the rapid change of external price, arbitrage conditions disappeared and hedging cannot be completed, resulting in unilateral loss. If the system wants to hedge off this part of the losses, it needs to give away more profits. If not, it will easily lead to more losseswhen encountering a unilateral market. Essentially, the arbitrage needs to be filled by systematic profits, that is, transaction fees. Once the transaction fees get high, it is no different from the big slippages of Uniswap, and it depends on the users who come to trade to pay the costs.

In other words, DODO’s model relies heavily on high-frequency trading, but in the current market, it is not an easy thing to do. So DODO is highly innovative but has a low degree of utility.

CoFiX (Innovation Index: 🌟🌟🌟🌟, Utility Index: 🌟🌟🌟)

COFIX, founded in March this year, is a community-driven DeFi project. CoFiX also introduced an Oracle as a price-feeding solution. By introducing the NEST oracle, CoFiX can realize the quantitative calculation of both transaction and asset pricing, provide more efficient pricing and better risk control solutions for market makers and traders automatically.

The CoFiX token is CoFi, which can be obtained through a variety of mining, liquidity mining and other means.

In layman’s terms, adding liquidity to the CoFiX pool is a market maker’s attempt to take on some risk of price fluctuations in order to gain profits from the trading process. In CoFiX, the definitions of market-making, redemption, exchange transactions, arelikely to affect the funds’ structure of the CoFiX pool, which is the source of price volatility risk.

According to CoFiX’s WhitePaper, the biggest advantage of its design is that it allows these risks to be calculated and managed using algorithms. This kind of algorithms allow traders and market makers to participate efficiently in DeFi markets while accurately pricing the risks.

CoFiX’s solution to the risk of the asset’s price fluctuations is hedging. CoFiX provides a dedicated hedging tool that can monitor the asset movements in real time and perform corresponding hedging operations on a centralized exchange, it is theoretically possible to keep the assets in constant growth.

However, CoFiX and DODO have the same weakness, that is, LP’s actual losses are still too large. Invoking Oracle results in high transaction fee and over-reliance on the Oracle’s data.

DeFi Swap (Innovation Index: 🌟🌟, Utility Index: 🌟🌟🌟)

DeFi Swap is an Ethereum-based decentralized trading and mining platform launched by , a cryptocurrency debit card company. It currently supports exchange between WETH, USDT, USDC, DAI, LINK, COMP, and CRO.

Users who provide liquidity to the pools can receive a 0.3% transaction fee and CRO Token by staking on the platform. said it would offer at least 14m CRO (1m a day) in the first 14 days since the launch of DeFi Swap.

Overall, DeFi Swap doesn’t have a lot of technical innovation and relies more on centralized traffic.

SashimiSwap (Innovation Index: 🌟🌟🌟🌟, Utility Index: 🌟🌟🌟🌟)

SashimiSwap, a project initiated by the famous public-chain project aelf, was launched in September. Compared with the initial version of Sashimi, version 2.1 has many new features, such as AMM trading, Vaults, double farming, etc, in order to improve the overall profits for liquidity providers.

Overall, Sashimi has integrated trading and Vaults perfectly. Through the collaboration between multiple components, it can maximize the use of the assets of liquidity providers, and invest 90% of the assets in the liquidity pool in different DiFi products for safe investment and earn sustainable income.

Whereas most other platforms primarily rely on transaction fees, SashimiSwap further multiplies its investment returns by optimally and automatically investing part of the idle liquidity in the most profitable platform(s), automatically adjusted every day. If likened to a foreign exchange, then SashimiSwap is depositing its idle assets into the bank(s) with the highest yield for maximum profits.

SASHIMI is the token on the SashimiSwap platform, which is distributed 100% through liquidity mining, without any pre-sale, pre-mining, and team shares. Holders of SASHIMI token are able to participate in the governance and receive SashimiSwap dividends through staking. Token release will be based on the inflation model, the total amount will be capped at 100 million, with each block releasing 10 SASHIMI currently.

At present, Sashimi’s governance right is mainly embodied in the following aspects: first, the voting right of the proposal can be exercised by obtaining the SALP token through staking. Second, the Community Marketing Fund in Sashimi’s Treasury can be invoked through voting for marketing, incentive program, project cooperation, and so on. In addition, the holders of SASHIMI token can earn interests and transaction fees share.

The weakness of Sashimi is that the margin adjustment will be triggered when users redeem their funds, resulting in the increase of gas fee. Moreover, the funds of LP can only be used for stable financial management, and the LP’s yield is only average.

OneSwap (Innovation Index: 🌟🌟🌟, Utility Index: 🌟🌟🌟)

OneSwap is also a DEX based on the AMM model, which is based on the constant product market maker model of Uniswap. On this basis, the order book model on the chain is introduced, which allows users to initiate the market order and limit order, and set the orders to be executed automatically according to the target price.

This model is a big change for traders.Users can choose to exchange in real time or set prices based on their needs, rather thanmonitoring market change in real time. This is closer to the trading experience of traditional centralized exchanges.

When processing a real-time exchange order, a Pair contract compares the best price in the order book to the AMM price and attempts to respond to a transaction request at the best price. For the part of the market price list that can not be traded, it will be processed in time through the CPMM model, the limit order transactions that meet the conditions will be processed in time according to the price fluctuation of CPMM, and the untraded orders will be temporarily saved to the order book on the chain to be processed later. In a word, everything is aimed to set the optimal transaction for the user.

OneSwap also provides a trading table similar to traditional CEX on the trading interface to facilitate traders to make trading decisions. You can view all the order books, candlesticks, trading volume, etc..

OneSwap has also been optimized to solve the problem that gas fee is too high in chain matchmaking mode. This includes a deep optimization of the Pair contract. OneSwap reduces gas fee by optimizing the data structure of Pair contract, eliminating the lightning exchange function on UniSwap and the price predictor on the chain.

One of the disadvantages of OneSwap is that the limit order will increase the gas fee, so will placing orders.


At the moment, AMM is still in its early stages. As we can see, Uniswap has not yet satisfied the needs of various market makers, so other projects are coming up with their own ideas to meet the demand of more market makers and traders.

We believe that more and more innovations will emerge in liquidity mining. Although some projects are just start-ups, incremental improvements may one day lead to new developments.




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