The rapid development of automated market makers (AMMs) is one of the main forces driving the expansion of decentralized exchanges (DEXs), which surpassed 5% of total crypto exchange volume last month, per a new report.
Over 90% of DEX volume is currently generated by AMMs, according to research published by crypto analysis company Messari. However, it is yet to be seen if these robust growth states will translate into value for AAM tokens.
The Messari report authors wrote,
“Crypto has massively decreased the time it takes to generate substantial revenue. AMMs that have been live for a few years (some months) are now generating nine figures.”
As of September 13, the top five AMMs in terms of annual revenues included Uniswap at USD 406m, SushiSwap with USD 228m, Balancer at USD 114m, Swerve with USD 29.6m and Curve with USD 15m, also per Messari.
The firm’s analysts noted that AMM revenues have a weak relationship with the value of their respective tokens.
In the case of SushiSwap, the price-to-sales ratio of its token stands at 0.91x, while for Balancer, which generated roughly half of the former’s revenues, the ratio is 19.1x. Swerve, which represents slightly more than a quarter of Balancer’s revenues, has a price-to-sales ratio of 5.9x. Meanwhile, in the case of Curve, whose revenues are about half of Swerve’s, the price-to-sales ratio is the highest among the top five AMMs – a staggering 388.3x.
Purdy forecasted that AMMs’ future success (or otherwise) hinges on their ability to fill two key niches.
He explained,
