BrownFi AMM

Demo

About

Why are you participating for Based SEA? Base is the leading layer-2 on Ethereum. BrownFi is a local SEA developer in Blockchain with 6 years of Web3-app building experience. BrownFi team wants to contribute to the growth of the Base ecosystem as well as spreading the presentation and impact of Base blockchain in SEA. Additional Features - Add Base testnet - Revise inventory verification formula - Add referral function - Update oracle formula

How it's made

What challenges are you focusing on? There are two fundamental AMM paradigms for volatile pairs: - Uniswap V2 is simple but low Capital Efficiency (CE), while Uniswap V3 (and Maverick, TraderJoe) has high CE but complicated UX for LPs. - Half of LPs on Uniswap V3 lose due to high IL. On the entire Ethereum, LPs have lost $755M for arbitrageurs since the Merge, according to Sorella Labs. Designing an AMM model with high CE and simple UX for average LPs with arbitrage resistance will bring huge benefits for new ecosystems with limited capital and low liquidity. How does your submission address this challenge? BrownFi invents a novel pricing mechanism for spot AMM based on oracle, to offer high capital efficiency, flexible market making and simple UX, arbitrage resistance. The core concept of BrownFi AMM employs an elastic Parameterization of Limit Order-Book (PLOB) from a published research papers on IEEE Access, a notable scientific journal. In brief, the core function of BrownFi AMM is based on an invention of a NOVEL price discovery mechanism. Mathematically, we prove that the constant-product market making (CPMM) model xy=k of Uniswap V2 is a special case of BrownFi's elastic PLOB model. Challenges we ran into Mathematical model: we faced many difficulties to prove - Our mathematical model is suitable to design a viable AMM as wished. - Our model has higher capital efficiency than UniswapV2 and outperforms UniswapV3 provided reliable price-sources