Overview

Infty.Trade: Pool Rate-Based AMM for Perpetual Contracts

Uniswap launched a wave in the spot market's Automated Market Makers (AMM), with platforms including Balance, Curve Finance, and TraderJoe enhancing their AMM systems. These innovators significantly advanced DeFi, making decentralized exchange spot volumes increasingly match those of centralized exchanges. Despite a 300x increase in decentralized spot volumes since 2020, the 30-day volume for decentralized perpetual trades only matches 1-day of centralized perpetual trades without a similar surge in AMM for perpetual. The key reason is the inherent differences between perpetual and spot markets, where applying the "Constant Function Market Maker (CFMM)" directly to perpetuals shows inherent flaws.

To address this, Infty.Trade has introduced the Pool Rate Market Maker (PRMM), an innovative AMM mechanism designed for perpetual contracts. Based on the liquidity pool's balance rate, this mechanism efficiently enables price discovery for perpetuals and offers substantial market-making opportunities for liquidity providers (LPs). LPs can share in trading fee revenue by bearing the risk of temporary imbalances in the liquidity pool.

DeFi embodies the true essence of cryptocurrencies. Driven by a desire to enhance trading volumes for decentralized perpetual trades, we've incorporated AI to help traders reduce liquidation risks and lower the barriers to entry for decentralized perpetual trading. This approach ensures a superior trading experience in decentralized perpetuals compared to their centralized counterparts.