A Batch Auction is a trading mechanism where multiple orders are collected over a specified time interval. These orders are then executed simultaneously at a single clearing price. This method differs from continuous trading by consolidating transactions. It is designed to reduce market manipulation and ensure equitable pricing for all participants.
Context
Batch auctions are gaining prominence in decentralized finance (DeFi) to mitigate issues such as front-running and Maximal Extractable Value (MEV). Their application in token distribution and certain decentralized exchange models is a current topic. Observing their effectiveness in achieving fair and transparent price discovery is a key development.
This research introduces a batch-processing AMM mechanism that maintains a constant potential function, provably eliminating miner arbitrage and enforcing strategy-proof trading.
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