Session 6 & 7

Agenda

Welcome

Hello to new members, introduce yourself

Logistics

Topic of today

Section: 5. Engineering Ethics in Web3, Michael Zargham (2021)

Open questions

Closing

Topics of Today

5. Engineering Ethics in Web3, Michael Zargham (2021)

https://medium.com/token-engineering-commons/engineering-ethics-in-web3-18d981278018

Module 2 - Part 1: Introduction to AMMs

What is an AMM?

Automated Market Maker(AMM) is a type of decentralized exchange which is based on a mathematical formula of price assets. It allows digital assets to be traded without any permissions and automatically by using liquidity pools instead of any traditional buyers and sellers which uses an order book that was used in traditional exchange, here assets are priced according to a pricing algorithm.

Example Uniswap
For example, Uniswap uses p * q = k, where p is the amount of one token in the liquidity pool, and q is the amount of the other. Here “k” is a fixed constant which means the pool’s total liquidity always has to remain the same. For further explanation let us take an example if an AMM has coin A and Coin B, two volatile assets, every time A is bought, the price of A goes up as there is less A in the pool than before the purchase. Conversely, the price of B goes down as there is more B in the pool. The pool stays in constant balance, where the total value of A in the pool will always equal the total value of B in the pool. The size will expand only when new liquidity providers join the pool.

https://dappradar.com/defi

These are the benefits of Automated Market Maker (AMM):

Anyone could be a liquidity provider.

You don’t need a trader to trade.

Lower transaction fees.

High liquidity for trading activities.

Reduced slippage.

What is a Flash Loan?

Flash Loans allow you to borrow any available amount of assets without putting up any collateral, as long as the liquidity is returned to the protocol within one block transaction. To do a Flash Loan, you will need to build a contract that requests a Flash Loan. The contract will then need to execute the instructed steps and pay back the loan + interest and fees all within the same transaction.

Comments & Questions

Just type here your comments and qustions 😄

Some kind of UX for non engineers would be great because making simulations is a very technical task

Open Questions

Make a summary of AMMs

Closing

Session 6 & 7

Agenda

Welcome

Hello to new members, introduce yourself

Logistics

Topic of today

Section: 5. Engineering Ethics in Web3, Michael Zargham (2021)

Open questions

Closing

Topics of Today

5. Engineering Ethics in Web3, Michael Zargham (2021)

https://medium.com/token-engineering-commons/engineering-ethics-in-web3-18d981278018

Module 2 - Part 1: Introduction to AMMs

What is an AMM?

Automated Market Maker(AMM) is a type of decentralized exchange which is based on a mathematical formula of price assets. It allows digital assets to be traded without any permissions and automatically by using liquidity pools instead of any traditional buyers and sellers which uses an order book that was used in traditional exchange, here assets are priced according to a pricing algorithm.

Example Uniswap
For example, Uniswap uses p * q = k, where p is the amount of one token in the liquidity pool, and q is the amount of the other. Here “k” is a fixed constant which means the pool’s total liquidity always has to remain the same. For further explanation let us take an example if an AMM has coin A and Coin B, two volatile assets, every time A is bought, the price of A goes up as there is less A in the pool than before the purchase. Conversely, the price of B goes down as there is more B in the pool. The pool stays in constant balance, where the total value of A in the pool will always equal the total value of B in the pool. The size will expand only when new liquidity providers join the pool.

https://dappradar.com/defi

These are the benefits of Automated Market Maker (AMM):

Anyone could be a liquidity provider.

You don’t need a trader to trade.

Lower transaction fees.

High liquidity for trading activities.

Reduced slippage.

What is a Flash Loan?

Flash Loans allow you to borrow any available amount of assets without putting up any collateral, as long as the liquidity is returned to the protocol within one block transaction. To do a Flash Loan, you will need to build a contract that requests a Flash Loan. The contract will then need to execute the instructed steps and pay back the loan + interest and fees all within the same transaction.

Comments & Questions

Just type here your comments and qustions 😄

Some kind of UX for non engineers would be great because making simulations is a very technical task

Open Questions

Make a summary of AMMs

Closing