Uniswap Founder: AMMs Outperform Order Books on Low-Liquidity Pairs, High-Volatility Tail Markets, and Mainstream Tokens

On January 6, Uniswap founder Hayden Adams posted on X, pushing back strongly against the narrative that Automated Market Makers (AMMs) are at a disadvantage. He noted that in low-volatility currency pairs, AMMs can deliver stable returns for small-capital investors, thereby eroding the competitiveness of professional market makers. In high-volatility long-tail markets, AMMs are the only scalable option—here, project teams or early backers act as liquidity providers (LPs), and their liquidity provision outperforms paying option fees to market makers. For high-volatility mainstream tokens, Adams said AMMs are continuing to grow. While order books currently operate optimally, AMM development is still in its early days. Through the Hook feature in Uniswap v4, more profitable liquidity pools will be available down the line. Adams believes that thanks to lower capital costs and the ease of bundling and collateralizing liquidity, AMMs will ultimately come out on top in this space.