SBF Profile picture
26 Oct, 14 tweets, 3 min read
1) AMMs on Serum
3) One thing you can do on Serum is build an AMM, just like Uniswap.

The difference is just that it's faster and cheaper.

Does that matter?
4) It does!

The biggest thing: say there's an ETH/USDC pool and ETH slowly drops 1%.

On Serum, someone will arb it when it's good by ~35bps or so.

On ETH -- there is a significant gas cost, and also uncertainty in whether you'll get filled.

That means adverse selection.
5) If you're an arb bot and you see a 35bp spread in Uniswap -- so 5bps after taker fees:

a) if nothing moves you're competing with other bots and maybe 25% you get the trade
b) if things revert other bots will cancel and so you'll definitely get the trade

your fill is worse!
6) so the arb bot widens out by gas + adverse selection, maybe looking for 15bps-50bps.

In the end, the IL is the same for the pool.

But the volume is less, so rebates are less.

Or put another way: average trade is worse for it.

So fast/cheap lowers effective IL for AMMs.
7) How else is it different?

Well -- Serum has on-chain orderbooks!

So your AMM could send maker orders on the DEX to mimic the curve.
8) That means that the AMM will be able to have some control over its IL:

You don't have to wait for a bot to look at the AMM. The bots look at the orderbooks anyway.

So it's a stronger version of (6): you can make sure the trades happen at orderbook prices.
9) But also, it means customers can find it easily!

They don't have to even know about the AMM: if they trade on the orderbook, they'll automatically get the AMM's liquidity, and the AMM will get their flow.
10) How does this work?

Well, the DEX is on-chain.

So an on-chain program can send orders in it.

In particular, a Pool can!…

So you can use Pools to build an AMM that trades on a Serum DEX.
11) Note this automatically gets to use Serum's cranks, and the on-chain orderbooks and matching engines.

It's also totally customizable. You don't need to have 50/50 balances; you can customize the curve; you can have many tokens; etc.
12) What else can you do?

Well--you could build borrow-lending (or wait for one to come out--soon!), and compose with it for margin.

Or you could let people place limit orders or triggered orders: either through the dex, or with another on-chain program.
13) You can also use them for yield--

--either by dropping yield on AMM pool token holders, or _in_ the pools.
14) The first Serum AMMs should start coming out in the next day or two.

(and for now, an off-chain one:…)

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with SBF

SBF Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @SBF_Alameda

28 Oct
1) Some updates on Serum Swap!
3) The SRM airdrop period has started! 1m SRM this month.

Will happen at 20 random times in the SRM pools.

Will post when it does.
Read 9 tweets
27 Oct
1) Some brief thoughts on
3) AMMs have problems.

Primarily impermanent loss; or put another way:

blindly providing while people pick you off to market moves.
Read 8 tweets
27 Oct
1) The first AMMs are live on @ProjectSerum!

1,000,000 SRM yield this month! Image
2) NOT INVESTMENT ADVICE isn't audited. Use at your own risk.
3) You can create AMM pools for any pair of SPL tokens; trade against the pools; add liquidity; etc.

1 second settlement, $0.00002 gas!
Read 9 tweets
26 Oct
1) HUGE UI/UX improvement to Solana:

Send someone an SPL token just using their SOL address!
3) What does this mean?

Well, on Ethereum, say your address is X.

Then you'd send ETH and all ERC20's directly to X.

Solana is different.
Read 14 tweets
25 Oct
1) thoughts on crypto account security
3) The first question you should ask yourself is:

"how sad would I be to lose these funds?"

Spend as much attention as makes sense given the cost

a) "lol who cares": username/password, stick in password manager; or log in with google/etc.; whatever.
Read 13 tweets
21 Oct
1) calm and storm
3) It's been too long since there have been major releases in Serum, or in FTX.

Partially that's because there have been a lot of large things churning in the background which have taken a few montsh.

Partially that's because a few quicker things were delayed.
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!