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dAMM Finance Advances the DeFi Space with rAMM, a New and Improved Market-Making Tool

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The dAMM Finance team has announced the launch of a new feature in the institutional lending realm, rAMM, focused on refurbishing our notion of undercollateralized lending. Through rAMM, users can Request a Market Maker (rAMM); simply put, this feature lets users access dedicated market-making using dAMM infrastructure.

Joshua Baker, the CEO of dAMM asserted that:

“We saw the need for a new and improved market-making tool that will help advance the decentralized finance space to greater levels. rAMM is a request for a market maker as a service solution that will be compatible with all EVM chains, with the big ones being Arbitrum, Avax, Optimism, Polygon, and BSC. rAMM will provide multiple benefits to token issuers, dAMM Community Members, $dAMM token holders, and market makers.”

In decentralized finance, new protocols or token issuers need liquidity when launching on a DEX, dApp, or CEX and often have to find referrals and recommendations for a single market maker to integrate with. This puts them in a tough spot because they need to know which market maker conditions are more beneficial for them and what their track record in terms of revenue and profit might be. A market maker's role is to provide liquidity across different exchanges and earn profits by trading and interest on the initial funding after coming into a long-term contract when they integrate with new token issuers.

What rAMM brings onto dAMM

Look at rAMM as a “marketplace” of market makers and new protocols to manage and negotiate market-making deals more transparently. It includes monthly reports on market makers performance verified via on-chain. There is the rAMM pool in place within this marketplace where token issuers can deposit their tokens and have a selection of approved Market Makers provide them with a loan in return. When tokens are deposited, the token issuer earns bdAMM distribution rewards, and they receive their payments in tokens or USDC in addition to negotiated premiums or yield.

To rid the institutional lending ecosystem of existing drawbacks, rAMM comes in with the following:

  • Aggregated Monthly Reporting on Volume, Spreads, Uptime, Size & Depth, etc.
  • Multiple MMs through a single pool
  • Dedicated Market Making (DMM) services from all the major MMs in crypto
  • Streamlined terms where you no longer have to negotiate bespoke agreements with individual MMs

Market-making companies such as GSR, Wintermute, Gravity Team, Empirica, and also high net worth traders doing market-making and providing liquidity across multiple token issuers and exchanges have something to smile about thanks to rAMM, which include:

  • Access to divergent tokens they otherwise wouldn't be able to market make for. Multiple options for them mean more profits due to a wide range of assets to provide liquidity & market-making services.
  • No need for contracts or increased background time and costs. Faster time to market is beneficial for both protocols and market makers since a reduction in the negotiations and contracts means that both parties will start earning from their efforts faster than their competitors.
  • Capital and resource efficiency due to only one integration, the rAMM pool.

The divergent market makers mentioned above have a few rules to abide by should they receive tokens from the rAMM pool. They get an annual rolling agreement in which they can return the original amount of tokens, the original loan amount in USDC plus a negotiated USDC premium, or the original loan amount in USDC plus a negotiated interest.

A New Dawn in Lending

dAMM gives borrowers access to under-collateralized loans and high yields for liquidity providers and want to take this a notch higher with rAMM. With rAMM, token issuers can access multiple market makers, so rather than a single entity having all the power, the loan and agreement might be split across 3 or 4 in the same pool. This alleviates risk but also helps with more liquidity provision.

As it seems rAMM by dAMM Finance is spelling out a new dawn in institutional lending by providing multiple benefits to token issuers, dAMM Community Members, $dAMM token holders, and market makers through dedicated market-making services using the dAMM infrastructure.