Arrakis’ Post

🚀 DeFi never sleeps! A brand-new whitepaper from Arrakis on an Automated Market Maker (AMM) that is resistant to MEV attacks! 🔥 Arrakis Finance and Valantis Labs have created the Hybrid Order Type (HOT) AMM, a novel solution designed to mitigate Miner Extractable Value (MEV) in the form of Loss-Versus-Rebalancing (LVR) - a measure of arbitrage - by working symbiotically with intent-centric protocols. How HOT AMM Works ⚙️ ▶ Hybrid Execution Setup: Trades can occur through a permissionless AMM swap or a novel Request for Quote (RfQ) system. ▶ Deterministic Quotes: Solvers can receive deterministic quotes to trade against the pool, which updates key AMM state variables like the spot price and dynamic fee. ▶ Fresher Pricing: The combination of updated pricing and dynamic fees provides robust guarantees of LVR reduction for liquidity providers (LPs). Advantages Over Conventional AMMs 📈 The HOT AMM offers several benefits compared to traditional AMMs: Mitigation of MEV: By reducing LVR, the HOT AMM protects LPs from MEV attacks. ▶ Dynamic Fees: Protective dynamic fees adjust based on market conditions, ensuring fairer and more efficient trading. ▶ Symbiotic Protocol Integration: Works alongside intent-centric protocols to enhance the overall trading experience. Core Design Elements of HOT AMM 🛠️ Hybrid Execution: Combining familiar AMM swaps with a novel RfQ system. State Variable Updates: Ensuring accurate and timely updates to spot prices and dynamic fees. Stay ahead in the DeFi game with the latest innovations. 🛡️📄