Before revision:  We show that, even without information asymmetries,  the order execution mechanism of the blockchain-based exchange induces adverse selection problems for liquidity providers if token prices are volatile. AMM is more likely to be adopted for pairs of coins which are stable or of high personal use for investors.
After revision:  We show that, even without information asymmetries, the order execution mechanism of the blockchain-based exchange . AMMs are more likely to be adopted for pairs of coins which are stable or of high personal use for investors.