Abstract

While Constant Function Market Makers (CFMMs) offer the convenience of continuous liquidity, their reliance on formula-based price curves can result in inefficiencies in price discovery for traders and hidden losses for Liquidity Providers (LPs). Beyond Impermanent Loss (IL), LPs can suffer from Loss-Versus-Rebalancing (LVR) due to toxic order flow (arbitrageurs). This whitepaper introduces Dextr, an Actively Validated Market Maker (AVMM), powered by EigenLayer AVS as a potential solution. Dextr is designed to protect, capture, and insure users against Maximal Extractable Value (MEV), allowing them to retain more value and achieve capital efficiency greater than 1.