<p>Why Hanson's logarithmic scoring rule define an Automated Market Maker?
We have in <a href="http://users.wfu.edu/strumpks/papers/JPMFinalVersion(JPM%203-1%20complete%20text%20310309).pdf" rel="nofollow noreferrer">this paper</a>
in page 47, section automated market maker, that this scoring rule can &quot;easily&quot; be turned into an AMM. But it seems to be so easy that no one can explain that clearly. Sometimes, LMSR is directly defined as an AMM like <a href="https://www.cs.cmu.edu/%7E./sandholm/liquidity-sensitive%20automated%20market%20maker.teac.pdf" rel="nofollow noreferrer">here</a>
middle of page 2.
Well, in all research I did, everyone consider that it's an AMM, but Hanson do not really explain why...</p>

CC BY-SA 4.0
2020-11-22T15:20:27.010Z
please use the hyperlink function (shortcut: CTRL+L) when inserting links otherwise the text easily becomes unintelligible.
1muflon1
CC BY-SA 4.0
2023-01-25T16:39:40.427Z
I was wondering about the same and found the answer in Section 5 of this paper: https://arxiv.org/ftp/arxiv/papers/1206/1206.5252.pdf
Christoph
<markets><financial-markets>
Why Hanson's logarithmic scoring rule define an Automated Market Maker?
wainwain
# Why Hanson's logarithmic scoring rule define an Automated Market Maker?

(Asked by: username_0 on 2020-11-22)

Why Hanson's logarithmic scoring rule define an Automated Market Maker?
We have in [this paper](http://users.wfu.edu/strumpks/papers/JPMFinalVersion(JPM%203-1%20complete%20text%20310309).pdf)
in page 47, section automated market maker, that this scoring rule can "easily" be turned into an AMM. But it seems to be so easy that no one can explain that clearly. Sometimes, LMSR is directly defined as an AMM like [here](https://www.cs.cmu.edu/%7E./sandholm/liquidity-sensitive%20automated%20market%20maker.teac.pdf)
middle of page 2.
Well, in all research I did, everyone consider that it's an AMM, but Hanson do not really explain why...

**Tags:** markets, financial-markets

> **Comments:**
> **username_1**: please use the hyperlink function (shortcut: CTRL+L) when inserting links otherwise the text easily becomes unintelligible.  
> **username_2**: I was wondering about the same and found the answer in Section 5 of this paper: https://arxiv.org/ftp/arxiv/papers/1206/1206.5252.pdf  

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## 0 answers

