\#CLMM is Concentrated Liquidity Market Maker, and AMM is Automated Market Maker. They are both liquidity provision mechanisms used in decentralized exchanges. Both have their own advantages and disadvantages.
Traditional automated markeе makers spread your liquidity across a wide price. On the other hand, concentrated liquidity market makers CLMM aims to improve the capital efficiency of decentralized exchanges and provide an attractive yield for liquidity providers.
CLMM algorithm focuses on providing deep liquidity at the current market price, which means less slippage and better returns for LPs.
By designating liquidity to be used for trades within a specific price range, you can make your assets work harder for you and maximize your returns.
7 thoughts on “What are your thoughts on CLMM vs. AMM?”
CLMM is an improvement on conventional constant product AMM, it just allow LPs to control ur liquidity range, that’s all.
The future will be a hybrid of off chain matches before MM, like COW and 1inch fusion.
Talking about CLMM, I came across this project ICHI – concentrated liquidity market maker algorithm.
With CLMM uniswap has a chance to grab Market share from curve.
I don’t think we abandon AMMs just yet but if CLMMs live up to the hype then I think they eventually take over. Too soon to really tell. But as always the markets will decide the winner and then everyone will have to switch or be made obsolete.
Orderbook will eventually win
> Traditional automated markeе makers spread your liquidity across a wide price. **On the other hand, concentrated liquidity market makers** CLMM aims to improve the capital efficiency of decentralized exchanges **and provide an attractive yield for liquidity providers.**
AMMs provide attractive yields as well.
ohhh my! what if there was a new thing combining Concentrated Liq’s capital efficiency with the Limit Orders as you know them?
[will be launched once the market trends become more friendly]