Hayden Adams published his first blog post since 2019 arguing that automated market makers will capture the largest financial markets once tokenized assets trade against each other at scale, rather than routing through dollar pairs. The post arrived as on-chain real-world asset deposits sit near $3.98 billion, up roughly sixfold from $650.88 million twelve months ago, per DeFiLlama data. Total tokenized issuance across the sector reached $34.55 billion.
Adams' core argument rests on a structural difference between blockchains and traditional finance: blockchains handle execution, custody and settlement as distinct layers, while traditional market makers bundle all three internally. That vertical integration concentrates professional market-making among a small number of established firms with the operational scale to manage it. Unbundling those functions on-chain lowers the barrier to entry and, Adams contends, changes who can compete.
The Uniswap founder made two specific market-type claims. In low-volatility pairs—stablecoin pools being the clearest example—AMMs win because passive liquidity providers with low cost of capital can undercut professional desks whose capital is more expensive. In the high-volatility long tail of assets, Adams said AMMs win by default: professional market makers largely ignore those markets, making AMMs the only practical source of liquidity. In his own words: "low volatility pairs: AMM wins easy bc it's stable yield for people with low cost of capital that undercut professional market makers with high cost of capital. High volatility long tail: AMM wins easy, basically the only game in town."
The argument drew a direct public rebuttal from a former XTX Markets trader. XTX is one of the largest algorithmic market-making firms in traditional finance. The Defiant published both Adams' original post and the trader's counter. The specific mechanics of the trader's counter-argument were not detailed, but the XTX background is relevant: XTX operates the kind of tightly integrated, low-latency trading infrastructure that Adams claims blockchains will eventually outflank.
The post extends a debate Adams has been in since at least January, when critics called the undercompensation of liquidity providers a structural flaw in AMM design—what on-chain analysts call loss-versus-rebalancing, or LVR, the spread between an LP's returns and a perfectly rebalanced portfolio over the same period. Adams pushed back by pointing to pool growth on Uniswap as evidence that AMM liquidity is more reusable as collateral than alternatives.
Uniswap has backed Adams' thesis with direct product moves. As of Aug. 13, the protocol supports more than 190 Robinhood stock tokens across its protocol, apps and API. A single tokenized SPY pool—tracking the S&P 500 ETF—recorded $33 million in volume over 12 days. In July, Uniswap introduced Permissioned Pools, a v4 hook that restricts trading to wallets on an issuer's approved whitelist. Securitize, Superstate and Dowgo joined as launch partners, targeting regulated issuers who need compliance controls baked into the liquidity layer.
Adams also expects passive AMM strategies to develop into something closer to index funds as on-chain asset migration continues. As more correlated asset classes move on-chain, AMMs' structural advantage in closely related pairs grows because the inventory risk a passive LP carries is lower when the two assets in a pool tend to move together. Cross-chain routing would handle the connections between asset clusters that cannot be paired directly.
Uniswap's SPY pool volume over 12 days is a small fraction of the $34.55 billion tokenized-issuance total, but it is the clearest live demonstration of Adams' thesis: a liquid, passive AMM pool for a correlated equity product.
UNI, Uniswap's governance token, has not moved with the protocol's positioning. The token was trading near $3.25 on the day Adams published his post, giving it a market cap of roughly $2.03 billion. The gap between the protocol's growing role in tokenized equities and the token's price reflects a long-standing disconnect in Uniswap's fee-switch governance: UNI holders have not yet voted to direct protocol fees to token holders, meaning volume growth does not translate directly into token returns.
Whether passive AMM liquidity can systematically undercut firms like XTX in correlated equity pairs—the specific battleground Adams is staking out with Permissioned Pools and the Robinhood token integrations—is the real test the current product cycle is running.
