Clear DefinitionsHybrid AMM Model
1 min read
Pronunciation
[hy-brid A‑M‑M mod‑uhl]
Analogy
Like a taxi dispatch system that uses both fixed fares and dynamic ride‑hailing bids to optimize matching.
Definition
An automated market maker design that combines features of constant‑function AMMs and order‑book matching to improve price efficiency and reduce impermanent loss.
Key Points Intro
Hybrid AMMs blend algorithmic liquidity pools with traditional order books.
Key Points
Pool liquidity: Continuous curve for small trades.
Order book: Limit orders for large or precise trades.
Fee tiers: Variable fees based on trade size and pool depth.
Dynamic adjustments: Rebalances between pool and book.
Example
A DEX uses a constant product pool for quick swaps under 1 ETH and an on‑chain order book for larger trades to minimize slippage.
Technical Deep Dive
Smart contract integrates Uniswap‑style `swap()` logic with a matching engine for `placeLimitOrder()`. Trades routed: if size threshold, use AMM; otherwise match against book orders.
Security Warning
Complex contracts increase attack surface; audit both AMM and order‑book modules.
Caveat
Operational complexity and gas costs higher than pure AMM or book models.
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