Automated market makers are finally going to become available on the Stellar network. This would be a great step forward for network. This new core advancement proposal, CAP-38, is meant to attract liquidity.
This feature will be added in next protocol upgrade. Ultra Stellar has already promised that their products will support automated market makers from day one. This includes Lobstr, Stellar X exchange and Stellar Term decentralized exchange.
This is the most anticipated @StellarOrg upgrade ever!
AMM is coming to Stellar and will be added in the *next protocol upgrade*.
Rest assured, our products will support liquidity pools from day one. You’ll be able to provide liquidity and earn yields 🚀 https://t.co/OtCGY6gN7Y
— Ultra Stellar (@ultrastellarhq) July 2, 2021
Stellar network has a lot of use cases. With automated market makers, the number of users will increase significantly. This can also effect value of XLM as well.
This feature will make Stellar the best network / blockchain for transferring any real world assets. Addition of liquidity pools will make it even better as it will bring uniswap-like functionality to Stellar network that is available on Ethereum.
CAP-38 will be introduced in Stellar Core v18 that is slated to be launched this fall. Once Stellar Core v18 is stable, CAP-38 will be added so that developers can start playing with sandboxed Automated Market Makers. After thorough testing, CAP-38 will be made available in public version.
Here are features of CAP-38 proposal.
1. Introduce constant product liquidity pools, so AMMs will rely on simple, Uniswap-like formulas
2. Allow liquidity pools to be created between any two assets
3. Create new operations so users can deposit into and withdraw from liquidity pools
4. Store pool shares, which can be exchanged for a portion of liquidity pool reserves, in depositor trustlines
5. Change path payments so they execute against liquidity pools when they provide a better exchange rate than the DEX
6. Have a fixed 0.3% fee