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Hayden Adams argues AMMs will dominate tokenized asset trading

Adams says onchain liquidity has already formed correlated clusters, and he projects that tokenized stocks could trade in pairs like NVDA/SPY rather than directly against dollars.

Reported · Written up by our desk · Market Structure

Hayden Adams, the Uniswap founder, published a blog post arguing that automated market makers could take over the biggest markets once tokenized assets begin trading against each other instead of being priced directly against dollars. He pointed to existing onchain behavior where liquidity concentrates into clusters, such as Ethereum assets against ETH, Solana assets against SOL, and stablecoins against each other, saying this structure emerged organically.

Adams said tokenization could reorganize equity trading in a similar way, using a bridge back to dollars only through an intermediate relationship. In his example, he describes NVDA/USD becoming NVDA/SPY with SPY/USD serving as the route back to USD exposure.

He linked his thesis to the 50th anniversary of index investing, including a reference to Jack Bogle's First Index Investment Trust, which closed its public offering on Aug. 31, 1976, after aiming to raise $50 million to $150 million and raising about $11.3 million. Adams argued that passive liquidity provision could displace professional market making, in the same way passive investing displaced active management.

The post drew pushback from a former XTX Markets trader, who said AMMs are going to zero, though commenters largely agreed with Adams' core mechanism that pairing correlated assets can reduce risk for liquidity providers. Adams also cited Citadel Securities trading close to 25% of US equity volume and reported record $12.2 billion in net trading revenue on roughly $21 billion of trading capital, though he said he views the figures as entrenchment rather than proof of the system's inevitability, focusing on the cost of capital for market makers.

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