A new post is published on the Stellar Development Foundation blog about Automated Market Makers on the Stellar blockchain. It’s a detailed post for enabling AMMs in Stellar protocol 18.
The new upgrade and adding AMMs to Stellar blockchain will not happen soon. But SDF has decided to talk details about the new feature and introduce its use-cases deeply to inform the community well. If the proposal goes to the final versions and receives the needed votes, we can expect many more new innovations and projects to launch on the Stellar blockchain.
New Opportunities on Stellar Blockchain
Automated market makers are essential components for adding comprehensive financial services to a blockchain. They make it possible to provide liquidity for trading platforms and create automatic DeFi services.
Stellar, like many other known blockchains, may move toward this path and provide the opportunity of automatic market-making to its user base.
Currently, Stellar supports many digital assets and is one of the leading blockchains in terms of issuing assets and enabling cross-border payments. But this blockchain needs more liquidity to provide better services. AMMs may solve this by making new services possible.
There has always been a desire for cheaper, faster, and highly usable cross-border payments on Stellar. This need has resulted in a technical proposal for adding AMMs to the blockchain. The proposal was published on June 25 and may go for voting soon.
SDF blog post says nothing about the time of voting for/against the AMM proposal. But when and if the proposal receives the votes, AMM functionality will become available for developers on Stellar. It will coexist with SDEX as an alternative source of liquidity.
As mentioned above, AMMs result in more liquidity for the Stellar blockchain and the products on it. According to the introduction post:
“AMMs on Stellar have the potential to provide easy-to-access liquidity at scale, especially for new markets and markets currently overlooked by market makers. That’s because asset issuers will no longer need to rely on market makers to stock order books: they can simply create liquidity pools and allow individual users to provide liquidity by depositing into them.”
Voting isn’t the only step needed for adding AMMs to the Stellar blockchain. Many technical developments should be done for adding the new functionality to this blockchain. According to the post, the Stellar Core team will work on the proposal and make it ready in the Stellar Core v18.0.0.