Equilibrium study of closed, fee-free CFMM economies releases v2
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Muqiao Huang, Ruodu Wang, and Yiyun Wang have released the v2 version of a paper (arXiv:2608.23915v2) focusing on equilibrium in a closed, fee-free two-asset, two-agent constant function market maker (CFMM) economy. This study clarifies the conditions under which unilateral no-trade equilibrium holds, derives the existence conditions for a representative agent, verifies the reachability of feasible states and the convergence of alternating utility-maximizing trades, and constitutes quantitative finance research in the field of trading and market microstructure.
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- arXiv q-finEquilibrium in a Closed, Fee-Free Constant Function Market Maker Economy
This paper focuses on the equilibrium problem of a closed, fee-free constant function market maker (CFMM) economy with two assets and two trading agents. It clarifies the conditions under which one-sided no-trade equilibria hold, derives the existence conditions for a representative agent, and verifies the reachability of feasible states and the convergence of alternating utility-maximizing trades. The research belongs to the field of trading and market microstructure, with the paper version arXiv:2608.23915v2.
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