Cross-Chain: The Future of AMM

Author: Ivan Yeung, Co-founder of Convergence Finance

Overview

Automated market makers, or AMM, serves as one of the most critical infrastructures in DeFi. Thanks to this innovation, trading on decentralized exchanges is now a common thing among DeFi users. While this year’s monthly aggregated trade volume of major DEXes has almost tripled compared to last year, most of the assets traded on-chain remained on the same chain. This could limit the scalability of DEX, even the growth of the broader DeFi space in the long run. The future of DeFi could lie on a viable cross-chain solution on trading, and cross-chain AMM could be the answer.

AMM Trading Remained Robust Despite Market Shows Signs of Cooldown

Trading activity remained vigorous on DEXes in the past few months. Although the broader crypto market was not favorable during that period, data from Dune Analytics shows that the aggregated monthly trade volume of major DEXes maintained at over 56 billion USD from June to September, which is after the massive broader market corrections noticeably higher than in late 2020.

 

Figure 1a: Monthly DEX Volume by Project

Source: Dune Analytics

 

Figure 1b: Monthly DEX Volume Grouped by Year