Uniswap’s Hayden Adams Rejects Claims AMMs Are Unsustainable

Uniswap founder Hayden Adams has pushed back on claims that automated market makers (AMMs) cannot last, responding on X on January 6 to criticism that liquidity providers (LPs) are structurally underpaid. The exchange has reopened a long-running DeFi debate over whether AMMs can compete with professional market makers, just as Uniswap is getting ready for major upgrades aimed at lifting returns for LPs. Adams Defends AMMs as Critics Question Fee Economics The discussion began after trader GEE-yohm “LAMB-bear” Lambert wrote that AMMs “can’t ever be sustainable” because fees are tied to realized volatility, while liquidity providers sell convexity that should be priced on implied volatility. In their view, that gap leaves LPs exposed during large price moves, with months of gains erased in days. Adams replied with a detailed rebuttal, arguing that AMMs already outperform alternatives in several market segments. For low-volatility pairs such as stablecoins, he said AMMs offer...

https://cryptopotato.com/uniswaps-hayden-adams-rejects-claims-amms-are-unsustainable/