In 2017, Constant Product Automated Market Makers (CPAMMs) were a groundbreaking solution in decentralized finance (DeFi), making onchain trading simple and accessible. But since their introduction, a web of inefficiencies and inherent risks has emerged.
Despite the best efforts of leading DEXes over the past 8 years, no amount of band-aid solutions and clever disguises as ‘features’ can fix the fundamental issues at their core.
As we enter 2025, it’s time to face the cold, hard truth:
No Price Control:
The AMM dictates your trade’s price outcome, not you.
MEV Sandwich Attack Vulnerability:
Nearly 75,000 sandwich attacks hit Ethereum users in the past 30 days, with over 40,000 falling victim.
Liquidity Limitations:
You’re at the mercy of pool depth, and most pools aren’t nearly as deep as you think.
Higher Costs:
For some leading AMMs, simply using their front end often means paying extra fees on every swap
Missed Opportunities:
Without the ability to pre-set trades, you’re either stuck watching the charts or missing out entirely.
The Problem with AMM Swaps
Swapping tokens on an AMM may seem foolproof, but as “foolproof” as it may seem, it’s just as inefficient, risky, and costly. Every time you hit “swap,” you’re engaging with a system designed for convenience- but not necessarily for your benefit. You’re acting as a taker: consuming liquidity provided by others in the pool, also known as liquidity providers (LPs). Let’s break it all down…
Slippage: The price you see is NOT the price you get
Slippage occurs when the price you see isn’t the price you get, and with AMMs, the truth is — the price you see is NEVER the price you get. Every trade you make alters the balance of the liquidity pool, a fundamental mechanic of how AMMs function. This isn’t a bug; it’s built into the design.
The AMM dictates your swap’s price outcome, not you.
Example: You’re swapping Token A for Token B. The pool quotes a price of 1 A = 2 B, but that’s only before the trade happens. Once you execute the swap, you end up with just 1.95 B per Token A.
This difference, called “slippage,” means you’re always getting less value than anticipated when trading on an AMM.
MEV Sandwich Attacks: Predators in the Pool
So, you know the price the AMM is showing you isn’t the price you’ll actually get, but you confirm the swap anyway. “How far off can the price really be?” you might think, just before discovering you’ve received much, much less than expected– far beyond just slippage. You’ve just been sandwich attacked.
Here’s how it works:
A bot deliberately places a buy order just before yours, artificially inflating the price.
Your swap executes at this inflated price, not at all what the AMM showed you.
The bot sells immediately after, pocketing the profit from the price difference– and leaving you with the loss.
This isn’t a rare occurrence or a one-off in DeFi.
In fact, over the past 30 days alone, nearly 75,000 sandwich attacks targeted Ethereum users, with over 40,000 falling victim.
Every time you swap on an AMM, you’re putting yourself at risk of being exploited by these predatory bots. Some solutions claim to help resist these attacks, but the reality is — it’s just not good enough.
https://eigenphi.io/mev/ethereum/sandwich
Pool-Dependent Liquidity: A Fragile Foundation
Now that you’ve seen how slippage and sandwich attacks can drastically reduce the value you get from your swap, there’s another critical AMM component to consider: the depth of the liquidity pool itself. Not all pools are created equal — low liquidity can lead to significant price discrepancies. When was the last time you checked a pool’s depth before swapping?
“Efficiency” with a Price Tag
Now, let’s say your AMM boasts that liquidity isn’t an issue, pulling from multiple DEXes. It sounds great, but you quickly realize it’s not as efficient as you’d like, and it comes at a cost — it’s not free. They’re selling you efficiency, but at the price of their front-end fees, with leading DEXes charging upwards of 25 basis points per swap.
Stop settling, and stop paying extra to do it.
Hidden “Costs” of the AMM: Missed Opportunities
With AMMs, the ability to pre-set trades simply doesn’t exist. This forces you into a reactive position, and you’re left with two choices:
You’re glued to your screen, constantly monitoring price movements, or
You miss out entirely on potential opportunities.
In a market that moves as quickly as crypto, being forced to watch every price change isn’t just inconvenient — it’s inefficient and, quite honestly, impossible.
With AMMs, you’re paying the price for a lack of control, and it’s costing you more than you realize.
From Taker to Maker: Back in the Driver’s Seat
Get out of the reactive role of a taker and step into the empowered position of a market maker.
Taker: Someone who “takes” from the market, accepting the price provided to them, usually by swapping assets on an AMM.
Maker: Someone who “makes” the market, providing their funds for others to take at prices they determine.
On Carbon DeFi by Bancor, this shift offers significant advantages over being a taker — advantages that AMMs simply can’t match.
Carbon DeFi is NOT an AMM, nor is it your typical DEX. Bancor went back to the drawing board for all the reasons we’ve discussed, creating an entirely new model for on-chain trading — one where you truly control your trades, and the protocol works with you, not against you.
Powered by Bancor’s latest innovation — asymmetric liquidity — this model eliminates all the limitations and risks inherent to AMMs, without relying on “band-aid fixes” or third-party dependencies. It’s specifically designed to not just help you transition from taker to maker, but to help you thrive as one.
Price Certainty: Get exactly the price you set — no surprises, no compromises, no AMM deciding your prices for you.
Immune to MEV Sandwich Attacks: Carbon DeFi is not an AMM, and its architecture makes sandwich attacks a thing of the past. You’re not just protected; you’re IMMUNE. (For the more technical, see the research by Bancor Project Lead, Dr. Mark Richardson, here.)
Chain-Wide Liquidity: Trade against the blockchain’s collective liquidity at NO ADDITIONAL COST with the built-in Arb Fast Lane.
Zero Protocol Fees: While others are charging upwards of 25 bps per swap, Carbon DeFi has ZERO protocol fees for makers.
Pre-set Swaps: Say goodbye to constantly monitoring the market. Set your desired price, and let your trades execute automatically– no need to react to every market shift.
A Single Price Target
Define your desired buy or sell price.
Deploy your Limit Order on Carbon DeFi.
Example: Want to sell Token A for 2 B tokens? Carbon DeFi ensures your order fills only when you receive exactly 2 B tokens — total price certainty, total sandwich attack immunity.
Scaling
Set a price range within which you’re willing to buy or sell.
Deploy your Range Order on Carbon DeFi.
Example: You want to buy Token A from $120 down to $100.
Automated Buy Low, Sell High
Set your buy price, along with your sell price.
Deploy your Recurring Order on Carbon DeFi.
Example:
You want to buy Token A at $100 and sell at $120.
Once Token A is purchased at $100, it is automatically available to sell at $120.
When it sells for $120, you’re automatically pre-set to buy more at $100.
The cycle repeats automatically as long as you keep your order active– efficient, hands-free, and always working to capitalize on market movements.
Bonus Benefits
Carbon DeFi isn’t just about Limit, Range, or Recurring Orders; it’s about giving you everything you need to thrive, all at zero cost to makers.
Drawing Tools: Visualize and refine strategies directly in the UI.
The Simulator: Backtest recurring orders with real historical data, risk-free, before committing.
Activity Tracker: Detailed records of your activity, exportable up to 10,000 entries at a time.
Explore: Browse active strategies to find inspiration.
The best part? There’s more to come– Carbon DeFi is just getting started.
The Bottom Line
In 2017, Bancor pioneered DeFi with the invention of the Constant Product AMM (CPAMM), setting the standard for how we trade onchain. But as the ecosystem evolved, it became clear that the system needed an upgrade. In 2020 Bancor introduced Concentrated Liquidity, and it was an improvement, but by far not the optimal product.
With Carbon DeFi, Bancor isn’t just patching up AMMs– it’s unveiling an entirely new decentralized exchange (DEX) model. By eliminating the fundamental flaws of AMMs– lack of price control, vulnerability to MEV sandwich attacks, dependence on liquidity pools, and the absence of true automation– Bancor is redefining onchain trading. It isn’t an evolution; it’s a revolution, built from the ground up to be smarter, safer, and entirely in your control– the way DeFi was always meant to be.So I ask you again- why are you still swapping on an AMM?
