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The DEX Brief No. 23

Why AMMs shouldn't stress about UniswapX, Clipper's new price study, + more.

Written by

The Shipyard Team

Published on

October 2, 2023

Top of Mind at Shipyard

  • DeFi seems worried that UniswapX giving private market makers first look at trades will lead to them absorbing all profitable flow. 
  • This seems unlikely given that Uni v4 enables any developer to create custom pools, giving them first look over UniswapX and market makers. 
  • Market makers may also not perform as well as theorized, pointing to little reason to worry about them dominating now. 

DeFi seems depressed about UniswapX, which gives first look at trades to a permissioned set of private market makers. The concern is that these market makers will fill all profitable flow, leaving only unprofitable flow for AMMs. This will result in AMMs facing both less volume and more adverse selection, driving losses in market share and returns.

After surveying insiders, the reality seems quite different. First, it turns out that Uniswap itself is giving first look to its own pools before offering trades to UniswapX. With Uni v4, any developer can create their own custom pool which will effectively get first look over UniswapX and thus over market makers. 

Moreover, it’s not clear that market makers are as good as they should be in theory. After all, 0x has supported RFQs for years and 1inch already supports it, but RFQ only fills 20-35% of trades. If they didn’t dominate in the past, there’s no real reason to think they will dominate in the future.

We did our own sampling study of Clipper vs. 0x API for a $10k ETH<>USDC trade every 15 minutes for a week and found that Clipper won 90%+ of the time. The future remains bright for on-chain liquidity. 

- Shipyard CEO, Mark Lurie

Below DEX

Clipper vs 0x Price Study

Why Do It? 🤔

The study was designed to provide an empirical analysis of Clipper’s price performance in real-world trading scenarios. The findings offer valuable insights for investors and traders seeking reliable platforms.

The Process 🛠️

The Clipper team conducted a comprehensive quote comparison study assessing Clipper's performance compared to 0x, a software provider that aggregates and compares prices for crypto swaps. The study was conducted over two weeks with data collected at 15-minute intervals. A total of 21,503 transactions were analyzed. 

Clipper Comes Out on Top 👀

Results showed Clipper outperformed 0x across the overwhelming majority of transactions, winning across both legs of a transaction 94.2% of the time (a leg is one direction of a swap) and winning at least one leg of a transaction 99.79% of the time. The study also proved that Clipper has a material gas advantage. Check out the blog for more key findings and study details. 

Clipper Launches Web3 Referrals on Fuul

In September, Clipper launched a referral program to reward loyal Clipper users. You can now refer anyone in your network with a customizable affiliate link and earn SAIL for doing so! You get a 20% SAIL match for every $1 you refer, and your referrals get above-market returns on their deposits and farming rewards on eligible chains.It’s a win-win. 

Around DeFi

  • PancakeSwap implements third-party fiat on-ramp across multiple chains. 
  • Mauve, a DEX for trading compliant and real world assets, goes live

Community Updates

Curious what’s up next? Check out the recent AdmiralDAO governance proposals: 

Written by

The Shipyard Team

Published on

October 2, 2023

March 29, 2024

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February 28, 2024

A positive omen for DeFi derivatives, Clipper's new facelift, the latest AdmiralDAO proposals, and more.

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