AMMs will win, but there is a long road ahead of us. Some general thoughts on the article and AMMs in general:

First of all, I view AMMs more as an options selling venues. Mark outs, lvr and other stuff is bs - all that really matters is that the realized volatility was higher than the IL you accrued, or in simple terms - lping vs hodl shall be profitable to justify providing liquidity on AMMs.

Someone is just selling naked options (lping without hedging), someone is hedging on perps, on lending markets, via options, etc (most serious lp goes hedge from my experience). Ultimately, providing concentrated liquidity is a trading strategy.

Secondly, the assets are correlated until they are not. How do you know it in advance (unless it is just usdc-usdt pool)? The comparison with ETF does not really work imo - ETFs sell the losers and buy the winners - LPing on AMMs does exactly the opposite.

AMMs in their current form are not the place for active market making from the traditional pov (neither are the blockchains). It is the best and the worst thing about AMMs. AMMs allow everyone to become the market maker, earn (well, or lose), but passive lping can not compete with active market making as we have seen on the example of propamms on Solana. But there are a lot of expatriations and innovations going on to make AMM lping attractive for active trading firms.

Composability - this is the ultimate killer feature of Defi and AMMs. Use your LP as collateral to hedge, to borrow, to leverage, to collateralize, etc. @0xfluid Smart Collateral has shown how powerful and capital efficient these features can be - with a fraction of TVL we can bootstrap hundreds of millions in liquidity - no traditional mm can compete with that, and stablecoin volumes are now fully dominated by AMMs.

And the best part - MMs hate AMMs - we are on the right track.

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