ammBoost: State Growth Control for AMMs

2024-06-24

IACR Cryptology ePrint Archive

AI Summary

To address on-chain throughput bottlenecks and state bloat induced by Automated Market Makers (AMMs) in Web3.0, this paper proposes ammBoost—a lightweight sidechain architecture that migrates core trading logic to Layer 2. It introduces a novel functional decomposition and L2 traffic aggregation paradigm, coupled with an epoch-based access mechanism and pool snapshot–driven deferred token settlement, enabling blockchain pruning and efficient state compression. Fully compatible with the Uniswap protocol, ammBoost significantly enhances scalability: gas costs are reduced by 96.05%, on-chain state growth is decreased by ≥93.42%, daily transaction throughput reaches 500× that of Uniswap, and finality latency is reduced by 99.94%.

Technology Category

• Multiagent Systems: Mechanism Design
• Search and Optimization: Distributed Search
• Machine Learning: Large Multimodal Models (LMMs)

Application Category

• Economics, Online Markets and Human Computation: Economic aspects of blockchain and cryptocurrencies
• Graph Algorithms and Modeling for the Web: Efficient manipulation of static and dynamic Web-related graphs
• Security and Privacy: Cryptocurrency and smart contracts

Abstract

Automated market makers (AMMs) are a prime example of Web 3.0 applications. Their popularity and high trading activity led to serious scalability issues in terms of throughput and state size. In this paper, we address these challenges by utilizing a new sidechain architecture, building a system called ammBoost. ammBoost reduces the amount of on-chain transactions, boosts throughput, and supports blockchain pruning. We devise several techniques to enable layer 2 processing for AMMs, including a functionality-split and layer 2 traffic summarization paradigm, an epoch-based deposit mechanism, and pool snapshot-based and delayed token-payout trading. We also build a proof-of-concept for a Uniswap-inspired use case to empirically evaluate performance. Our experiments show that ammBoost decreases the gas cost by 96.05% and the chain growth by at least 93.42%, and that it can support up to 500x of the daily traffic volume of Uniswap. We also compare ammBoost to an Optimism-inspired solution showing a 99.94% reduction in transaction finality.

Problem

• Address scalability issues in AMMs
• Reduce on-chain transactions and boost throughput
• Support blockchain pruning and improve transaction finality

Innovation

• Sidechain architecture reduces on-chain transactions
• Layer 2 processing with traffic summarization
• Epoch-based deposit and delayed token-payout trading