Time-Weighted Automated Market Maker (TWAMM)

A time-weighted automated market maker (TWAMM) is a type of automated market maker designed for traders who want to buy or sell a large amount of a token without moving the price sharply. Instead of executing the whole order at once, the trader sets a total amount and a time window, and the TWAMM breaks the order into a stream of very small virtual trades that execute against the pool block by block. The effect is similar to the time-weighted average price (TWAP) strategies used in traditional markets, with the difference that the splitting is built into the protocol and handled efficiently on-chain. The idea was published in 2021 by researchers associated with Paradigm and the founder of Uniswap. Spreading a trade out reduces price impact, but it exposes the trader to price changes during the window, and arbitrageurs keep pool prices aligned with other markets.