MM Strategy: Automated Bin Manager

The Nunchi Automated Bin Manager (ABM) is the market-making engine of the Yield Exchange (YEX) — the engine that turns LP capital into tight spreads, high fee capture, and lower inventory risk across our yield perpetuals.

At a high level, the ABM combines three pillars:

• Oracle-Bound Bin Geometry – Liquidity is placed in narrow “bins” around a fair, oracle-derived price, concentrating depth where real flow trades and minimizing bleed in dead zones.

• Deterministic Inventory Policy – Self-flattening skew, soft/hard caps, and reduce-only clips keep makers from drifting into toxic inventory during trends or volatility spikes.

• Cooperative Batch Clearing – A novel defensive rebalancing mechanism that nets inventory between makers at fair value, sharply reducing arbitrage leakage to external traders.

Instead of paying arbitrageurs to clean up mispriced books, the ABM lets Nunchi LPs keep more of the edge they generate, structurally improving risk-adjusted APY over time.

For a full technical walkthrough of the model and math, see our research post in collaboration with Brown University.

Where it runs: There is a dedicated ABM instance for each market on the YEX, continuously tuning bins, inventory, and internal netting to current conditions.