Our Vision
At QuantAMM, our vision is to build an AMM for Quants.
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An AMM that focuses on quantitative fund construction must implement all critical components of traditional passive managed products like ETFs, as well as implement all critical aspects that determine DeFi success.
Passive
Investment
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Low Cost — A large proportion of active management in TradFi was proven to be following simple rules while charging very high fees. Passive products were able to replicate results while offering much lower fees.
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Transparency — Stating the quantitative rules which govern the product allowed for the known exposure and risk. No humans making rash decisions or rugging.
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Accessibility — The ability for anyone to come and participate lowers barriers to entry. Fire and forget investing for medium and long term investment horizons.
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Return Predictability — Only true arbitrage can offer guarantied returns. However what you can offer is predictable exposure. TradFi ETFs have stated rebalance goals allowing for price based predictable modelling. This means ETFs can fulfil an exposure need in larger diversified portfolios.
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Compliance Friendly — An often overlooked piece of the puzzle is that governments and regulators allow you to easily buy passive products with simple investment accounts. The alternative of active managed funds still have significant barriers to entry.
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Asset management first, DEX second. Current DEXs with management layers are limited their underlying generic DEX infrastructure. You have to abandon first generation DEX principles to satisfy the asset management world.
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“Portfolio” construction — An often overlooked aspect is that managing assets is not just a dynamic strategy on a single pool. It is a construction of a well diversified product with strategy layers, risk management layers, regulatory layers, SMAs, sleeves, compliant internal transfers and many more layers. There needs to be composability, we we do solely using new future-proof AMM innovation — what we call composite pools.
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The right strategies — TradFi asset management can step in here as that industry has battle-tested time-dependent strategies. For this to be a completely passive approach, those rules need to be defined in SCs that are part of the protocol. This means there is not some jump to a different stack, protocol or be run off-chain.
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Efficiency of running and rebalancing — Running costs and arb costs must be small if you want the alpha to outweigh the costs. Asset managing vaults have tried to get around this by introducing off-chain steps or complex cross chain stacks to trade on DEXs themselves. All this complexity is adding risk, and trading yourself adds large cost inefficiency. Novel mathematical work allows the fundamentals of TradFi strategies to run on L1s (and L2s).