Decentralized Finance (DeFi) has emerged as a transformative force in the financial sector, with Automated Market Makers (AMMs) playing a crucial role in facilitating asset exchange and liquidity provision. However, most AMMs operate on the Ethereum blockchain and face challenges such as high transaction fees and price synchronization issues mainly due to Ethereum scalability issues. This paper addresses these limitations by investigating the performance of an Automated Market Maker (AMM) integrated at the protocol level of the XRP Ledger. Using game-theoretic simulations, we compared the XRPL-AMM to a Generic CPMM-based AMM (G-AMM) on Ethereum, akin to established players like Uniswap's V2 AMM implementation. The results demonstrate that the XRPL-AMM outperforms in terms of price synchronization with external markets, lower slippage, reduced impermanent loss, and improved returns for liquidity providers, particularly under volatile market conditions. The unique Continuous Auction Mechanism (CAM) of the XRPL-AMM further enhances its efficiency by incentivizing beneficial arbitrage. These findings highlight the potential of protocol-level AMM integration. To the best of our knowledge, the XRPL-AMM is one of the first AMMs built directly at the protocol level of a blockchain. Therefore, this inaugural study ventures into the unexplored domain of evaluating AMMs with protocol-level integration compared to traditional smart contracts implementations.

翻译：去中心化金融已成为金融领域的变革性力量，其中自动化做市商在促进资产交换和流动性供给方面发挥着关键作用。然而，大多数自动化做市商运行在以太坊区块链上，并面临高交易费用和价格同步问题等挑战，这主要源于以太坊的可扩展性限制。本文通过研究集成在XRP账本协议层的自动化做市商性能来应对这些局限。运用博弈论模拟方法，我们将XRPL-AMM与基于通用恒定乘积做市商模型的以太坊G-AMM进行对比，后者类似于Uniswap V2 AMM等成熟方案。结果表明，XRPL-AMM在外部市场价格同步、更低滑点、减少无常损失以及提升流动性提供者收益方面表现更优，尤其在波动市场条件下更为显著。XRPL-AMM独特的连续拍卖机制通过激励有益套利进一步提升了系统效率。这些发现凸显了协议层AMM集成的潜力。据我们所知，XRPL-AMM是首批直接在区块链协议层构建的AMM之一。因此，这项开创性研究首次探索了协议层集成AMM与传统智能合约实现方案的对比评估领域。