AMM-based Time-Weighted Average Price (TWAP)

This model uses AMM-observed prices averaged over time. This method smoothens volatility and provides resistance to price manipulation, though it responds slowly to rapid market changes. This trade-off can be adjusted through different time window settings.

The price at time $t$ is given by:

$${\text{TWAP}_t} = \frac{\sum P_t \times \Delta t}{\sum \Delta t}$$

where $P$_t denotes the AMM-observed spot price over each sampling interval and $Δt$ is the elapsed time of that interval. The sums cover all samples within the window ending at $t$. If all intervals are equal ($Δt$ is constant), TWAP reduces to the arithmetic mean of the sampled prices.