Fairness and Strategy-Proofness in Automated Market Makers (opens in new tab)

No deployed automated market maker lets its liquidity providers vote on the trading function. We show this is structural, not an oversight. On the weighted-product family with $n \geq 3$ assets, no aggregation rule is at once fair and strategy-proof. Arrovian fairness forces a unique form, the weighted Aitchison centroid, the weighted geometric mean of the providers' preferred pools. But fairness forces mean-type aggregation and strategy-proofne...