ProaqctiveMM

A proactive market maker (PMM) is an automated liquidity provision mechanism that uses external price oracles to optimize trading efficiency. Unlike traditional AMMs with static pricing curves, PMMs dynamically adjust liquidity distribution around the oracle price, concentrating capital where trades are most likely to occur. This reduces slippage for traders while maximizing capital efficiency for liquidity providers. The oracle feeds real-time market data, allowing the PMM to proactively rebalance positions and minimize impermanent loss. By leveraging external price information, PMMs bridge the gap between centralized exchange pricing and decentralized trading, offering improved user experience and competitive spreads.

1inch Aqua creates an unlocked liquidity layer where assets remain in user wallets but can be used simultaneously by multiple strategies with distinct access limits, enhancing capital efficiency. SwapVM supports building or using instruction libraries to assemble and deploy these trading strategies on Aqua’s shared liquidity. Pyth provides high-quality, real-time price oracles to power a proactive market maker, enabling dynamic pricing and risk management. Together, these technologies enable a proactive market maker to efficiently leverage user capital in real time across multiple strategies while relying on accurate external market data for pricing and execution