Uniswap founder says AMMs may outcompete traditional market makers as tokenization grows

Uniswap founder Hayden Adams said automated market makers could gain a competitive edge over traditional market makers as asset tokenization expands. In a post on X, Adams said tokenized assets can trade directly not only against the dollar but also against assets with similar price movements. Grouping highly correlated assets in this way reduces price volatility risk for liquidity providers, which in turn lowers the cost of supplying liquidity through AMMs, Adams said. By contrast, traditional market makers must bear separate hedging costs to reduce price volatility risk, Adams added. He added that as tokenization expands, liquidity is likely to concentrate in these correlated pairs, making it easier for AMMs to compete with traditional market makers.