Jonathan Choong, 2021 Finance First Class Honours Recipient

Congratulations to Jonathan Choong, UTS 2021 Finance Honours graduate who has been awarded first class Honours. This is a great reward for a challenging year of hard work.

Jonathan was a recipient of the 2021 UTS Business School Finance Honours scholarship and the the 2021 Pendal Group Honours internship and scholarship. This internship lead to him being appointed as an Investment Research Analyst with Pendal Group on completion of his Honours year.

We would also like to thank his Honours supervisors, David Michayluk, Vinay Patel, Talis Putnins, Ester Félez Viñas and Scott Walker for their feedback and guidance throughout his Honours year. A special thank you should also be made to Anne Haubo Dyhrberg for providing data for Jonathan to be able to undertake his thesis and Vitali Alexeev, our Honours co-ordinator.

His Honours thesis was titled: “Impermanent Loss and Price Discovery: Are Automated Market Makers a Sustainable Exchange Model?”

View his thesis

View video of his final thesis presentation

Automated market markers (AMMs) are a new decentralised exchange model that has grown to a multi-billion-dollar market; yet, it is unclear whether they are an economically robust and sustainable market type. Accounting for microstructure noise, Jonathan found that AMMs are the first to reflect new information in prices 62% of the time compared to their centralised counterparts. He also concluded that the QuickSwap exchange is the price leader within AMMs 72% of the time. Moreover, he demonstrated that profitability of liquidity provision within AMMs is primarily dependent on the asset’s price dynamics and that trade fees and impermanent loss have a measurable impact on AMM informational efficiency. His findings provide evidence that AMMs are a sustainable model for facilitating digital-asset trading, which benefits liquidity providers and protocol developers.