Uniswap Founder Defends AMMs Amid Sustainability Debate
Generally, People Think That automated market makers (AMMs) are not sustainable, But Hayden Adams, the founder of Uniswap, has responded to criticism about the sustainability of AMMs, arguing that they are not only viable but thriving in certain market conditions. Obviously, The debate was sparked by claims that liquidity providers (LPs) in AMMs are structurally underpaid due to the way fees are tied to realized volatility rather than implied volatility. Normally, You would think that AMMs are not effective, But Adams took to social media to defend AMMs, pointing out that they are particularly effective in low-volatility markets such as stablecoin pools.
AMM Sustainability Debate: Introduction
Usually, I Think That AMMs offer steady yields to participants with lower capital costs, allowing them to outperform professional market makers in these segments. Apparently, AMMs play a crucial role in providing liquidity for long-tail, high-volatility tokens where traditional market makers might not venture. Naturally, The discussion highlights a broader debate within the decentralized finance (DeFi) community about the future of AMMs.
Why AMMs Excel in Low‑Volatility Markets
Clearly, Critics argue that AMMs struggle to compete with professional market makers, especially in high-volatility markets like ETH pairs. However, Adams countered that AMMs have shown consistent growth and maturity over the years. Evidently, He also mentioned upcoming upgrades to Uniswap, such as v4 hooks, which will allow for custom logic at the pool level, potentially enhancing returns for LPs.
Broader DeFi Debate
Probably, Recent events have underscored both the potential and risks of AMMs. Interestingly, In November 2025, Balancer, another major AMM, suffered a significant exploit due to a code flaw, resulting in a $120 million loss. Conversely, Uniswap saw a positive market reaction when Adams proposed enabling a fee switch to share protocol revenue with UNI token holders, leading to a 35 % increase in the token’s price.
Recent Events: Risks and Rewards
Ultimately, The ongoing debate suggests that while AMMs face challenges, they are not doomed. Ideally, There is a growing consensus that innovation in fee structures and ongoing upgrades could address current inefficiencies and ensure the long-term sustainability of decentralized liquidity. Generally, You can see that AMMs are still a viable option for many investors.
Looking Ahead: Sustainability Through Innovation
Apparently, I Believe That the future of AMMs is uncertain, But one thing is clear, they will continue to play a major role in the DeFi community. Usually, People will continue to invest in AMMs, Despite the risks. Obviously, The rewards are too great to ignore. Normally, You would think that the risks outweigh the rewards, But that is not always the case.
