Whitepaper
Abstract: Hybrid Order Type (HOT) is a novel automated market maker (AMM) created by Arrakis Finance and Valantis Labs. The HOT AMM is designed to mitigate MEV in the form of LVR by symbiotically existing alongside intent-centric protocols. HOT pools have a hybrid execution setup whereby trades can either occur through a familiar permissionless AMM swap or through a novel RfQ system where solvers can receive a deterministic quote to trade against the pool in exchange for updating the two key AMM state variables: the spot price and the dynamic fee. The fresher pricing combined with protective dynamic fees provides robust guarantees of LVR reduction for LPs on Arrakis. In this paper, we present the core design elements of this novel AMM as well as its advantages over conventional AMMs.