From stablecoins to popular tokens, why are AMMs becoming increasingly dominant across various markets?

【Crypto World】A well-known DEX founder recently shared his views on the automated market maker mechanism, and his insights are quite interesting.

In stable trading pairs, AMMs can actually outperform professional market makers. Why? Because they can provide investors with low-cost, continuous, and stable returns, which is very difficult for traditional market-making models to achieve.

The real test is in the long-tail markets—those small tokens with extremely high volatility. Honestly, in this field, AMMs are almost the only reliable choice. Other market structures simply cannot scale to such a large volume, and the scalability of AMMs outperforms other solutions by a mile.

What about popular tokens? Competition is definitely fierce, but that doesn’t mean AMMs have no chance. With the upgrade and iteration of v4 hook technology, the profitability of liquidity pools will be greatly enhanced. This technological direction allows AMMs to find more ways to make money even in highly competitive environments.

Overall, different market environments have different needs, and the flexibility and customizability of AMMs are becoming increasingly strong, which could be the key to the continuous evolution of DEXs.