State of the Reactor: AMM Analysis - November 11, 2022

This presentation will be re-released by the team in a more detailed and official capacity at a later date.


  • The object of this presentation is to identify the “best” AMM for a given token or pair.
  • The definition of “best” is based upon various characteristics, including volatility, volume, competition, and AMM configuration.
  • The team developed internal models in order to run these simulations in both competitive and non-competitive scenarios.
  • The key metrics to these scenarios are total return, fee return, and pool turnover.
  • The simulations began with a 1:1 price ratio between the paired assets.
  • The following results do not include any additional pool incentives, and assume static gas fees and no admin fees.
  • Total return equals size of reserves at start minus size of reserves at the end.


Price Down Scenario: 65-85% sell volume (~60% negative price change)

Price Flat Scenario: 40-60% sell volume (~2% positive price change)


  • The team found that the ideal strategy is to optimize for low volatility periods and reduce risk during high volatility periods in order to minimize loss and maximize return.
  • The ability to tweak fee parameters on Curve v2 is a notable benefit over Uniswap and Balancer.
  • Balancer is an attractive option; however, the 50% admin fee reduces its real-world usefulness.
  • Uniswap v3 is hard to compare in these models, due to the need to actively manage liquidity positions.
  • Liquidity provisioning on AMMs is not well understood within the industry. The work done by the team is novel and offers insights that are not well-known across the automated market making space.
  • With the improved Reactor reward formulas, participants are rewarded based on performance. This aligns the various operators within the Tokemak ecosystem.
  • Gas prices will impact these results, but Curve is working on optimizations, and L2s will reduce the effects of gas fees.
  • Additional DEXs will be considered if they offer a competitive advantage over existing options. Some integrations with other DEXs have already been built; however, they will not be utilized if they are unprofitable for the system.
  • Stay tuned for additional information on accTOKE!
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