Cruz, Walter Hernandez;
Dahi, Firas;
Feng, Yebo;
Xu, Jiahua;
Malhotra, Aanchal;
Tasca, Paolo;
(2025)
AMM-based DEX on the XRP Ledger.
In:
2025 IEEE International Conference on Blockchain and Cryptocurrency (ICBC).
IEEE: Pisa, Italy.
(In press).
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Abstract
Automated Market Maker (AMM)-based Decentralized Exchanges (DEXs) are crucial in Decentralized Finance (DeFi), but Ethereum implementations suffer from high transaction costs and price synchronization challenges. To address these limitations, we compare the XRP Ledger (XRPL)-AMM-Decentralized Exchange (DEX), a protocol-level implementation, against a Generic AMM-based DEX (G-AMM-DEX) on Ethereum, akin to Uniswap's V2 AMM implementation, through agent-based simulations using real market data and multiple volatility scenarios generated via Geometric Brownian Motion (GBM). Results demonstrate that the XRPL-AMM-DEX achieves superior price synchronization, reduced slippage, and improved returns due to XRPL's lower fees and shorter block times, with benefits amplifying during market volatility. The integrated Continuous Auction Mechanism (CAM) further mitigates impermanent loss by redistributing arbitrage value to Liquidity Providers (LPs). To the best of our knowledge, this study represents the first comparative analysis between protocol-level and smart contract AMM-based DEX implementations and the first agent-based simulation validating theoretical auction mechanisms for AMM-based DEXs.
| Type: | Proceedings paper |
|---|---|
| Title: | AMM-based DEX on the XRP Ledger |
| Event: | 2025 IEEE International Conference on Blockchain and Cryptocurrency (ICBC) |
| Dates: | 2 Jun 2025 - 6 Jun 2025 |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1109/icbc64466.2025.11114626 |
| Publisher version: | https://doi.org/10.1109/icbc64466.2025.11114626 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Costs , Smart contracts , Finance , Writing , Decentralized applications , Data models , Blockchains , Cryptocurrency , Synchronization , Proposals |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10216028 |
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