Understanding Automated Market Making Instructions

Important: Automated Market Making Instructions can only be submitted by eligible institutional customers.

Understanding Automated Market Making Instructions

Automated Market Making (AMM) Instructions are an advanced feature of Bullish, allowing eligible customers to directly make markets using idle assets and generate income. AMM Instructions scale to billions of dollars and revenue is continuously generated while the market conditions support it.

Eligible customers have the flexibility to create one or more AMM Instructions for one or more markets. Each AMM Instruction has parameters that capture the customer’s preferred trading strategy and risk profile. Such parameters include:

  • A price range for bids and offers
  • A minimum bid/offer spread
  • Optional dynamic spread adjustments

These parameters are explained in more depth in the article on creating AMM Instructions.

AMM Revenue

Every time other market participants trade against the bids and offers sent by the AMM on your behalf, you will receive a portion of the revenue generated by those trades. This revenue derives from the Taker Fee paid by the trader and the spread you chose when you created the AMM Instruction. We collate and pay accrued revenue from your open AMM Instruction(s) into your spot account every hour, and also one final time when you terminate an instruction.

Since there will often be multiple AMM Instructions from multiple customers at the same price, we prorate the revenue generated by each trade according to the relative contribution of each AMM Instruction. Finally, the exchange itself applies an AMM fee.

Net AMM Revenue (per AMM Instruction, per trade) =

Gross AMM Revenue [of trade] x relative contribution [of AMM Instruction] x (1 - AMM fee)


  • Gross AMM Revenue (per trade) = traded notional x (taker fee + 1/2 spread)

  • Spread = MAX (fixed spread, dynamic spread if applied)

  • Traded notional is the total quote amount (e.g. BTC for BTC/USDC) filled by AMM Instructions in that trade for a buy, or the total base amount (e.g. USDC for BTC/USDC) for a sell

Monitoring AMM Instructions

After submitting your AMM Instructions, you will not need to perform any other actions as the system is fully automated using the parameters supplied in the instruction. However, we do recommend that you regularly review your accounts. You may also terminate your AMM Instructions at any time.

Warning: Customers eligible for contributing to our AMM Instructions are subject to various requirements and risks.

Please read carefully our Risk Warnings for more information.

Was this article helpful?
4 out of 5 found this helpful