Uniswap Founder Says AMMs Could Challenge Wall Street Makers
Automated market makers, or AMMs, may be moving from the edges of decentralized finance and into the centre of global trading, as per a blog posted by Uniswap Founder Hayden Adams today, August 18, 2026. In the blog post, the founder argues that tokenization and correlated trading pairs could eventually allow passive liquidity providers to challenge traditional market-making firms.
His argument compares today’s tokenization trend with the early days of index funds, which were dismissed as “Bogle’s folly” before becoming a big part of the investment industry.
From Index Funds to Tokenized Assets
When John Bogle launched the first index fund back in 1976, he hoped to raise $150 million. The fund raised only $11.3 million. Critics argued that a fund making no active decisions could never compete with professional investors. That view did not last. Index funds offered investors a cheaper, simpler route to market exposure, and passive investment products eventually came to dominate US investing.
Adams believes that tokenization may be approaching a similar turning point as well. Instead of looking at blockchain-based assets only as a faster settlement system, he sees tokenization as a way to make financial markets programmable.
The Depository Trust and Clearing Corporation, or DTCC, carried out live production trades involving tokenized stocks, exchange-traded funds, and U.S. Treasuries in July. More than 30 major firms participated, including BlackRock, Goldman Sachs, JPMorgan, Nasdaq, and the New York Stock Exchange.
Under recent regulatory arrangements, eligible securities can also trade in tokenized form while retaining the same ticker, rights, and privileges as their traditional counterparts.
The AMM Advantage
An AMM lets individuals supply assets to liquidity pools instead of depending on a centralized market maker. According to Adams, Uniswap, the most widely used AMM protocol, has processed over $4.6 trillion in trading volume.
The rise of Uniswap has made it possible for decentralized exchanges to account for over 20% of centralized spot trading volume, up from less than 1% a few years back.
AMMs were first successful in markets that had been overlooked by traditional businesses. Creating a liquidity pool required no negotiation with a professional trading firm. It was also easier to form pairs with stablecoins like USDC and USDT, whose prices always tend to move together. This minimizes risks for liquidity providers.
In addition, if the assets in question trend similarly, the liquidity pool will not be as vulnerable to fluctuations in the value of its holdings.
Why This Correlation Matters
Traditional market makers try to avoid taking too much risk by keeping their positions “delta neutral,” which usually requires costly hedging. AMMs can use a simpler approach by connecting assets that tend to move in a similar fashion instead of pairing everything directly with the U.S. dollar.
For example, NVIDIA could trade against the SPDR S&P 500 ETF, known as SPY. Oil companies could be paired with a tokenized oil fund, while private credit instruments could trade against tokenized Treasury funds. Investors can still buy assets using dollars. The only difference here is that automated routing could move through several liquidity pools, with a bridge pair such as SPY/USD connecting the wider network to dollars.
Passive Liquidity Meets Wall Street
Adams argues that this structure could separate the functions that are traditionally bundled inside large market-making firms. Blockchain networks provide shared settlement, open-source execution and programmable trading rules.
This could allow liquidity to come from asset holders, issuers, and investors who already want exposure to the underlying assets. These participants may accept lower returns than professional firms because they do not face the same overhead or hedging costs.
Traditional market makers, however, still dominate, with Citadel Securities handling about 25% of U.S. equity trading and generating roughly $12.2 billion in net trading revenue last year.
However, Adams says it is because of this concentration that the model can be remade. The initial implementation of tokenized stock trading on the Robinhood Chain is already underway, and in just 12 days, 10 tokenized stocks have reached a trading volume of $33 million among more than 11,000 traders. With the development of AMMs and tokenized assets, Adams thinks the markets could become cheaper and more accessible 24/7, with liquidity being determined by asset correlation, not financial infrastructure.
