Virtual Specialist AMM
A software 'specialist' that always quotes a two-sided market and takes the other side of every trade — the automated-market-maker idea, patented in 1996, years before AMMs became the backbone of on-chain trading.
Computer-implemented securities trading system with a virtual specialist function · HSX, Inc. · filed 1996-03-25 · granted 1999-09-07 · expired 2016-03-25
Playable, self-contained demo. Nothing is sent anywhere; it runs entirely in your browser.
The story
US5950176 came out of HSX, Inc. — the company behind the Hollywood Stock Exchange, a play-money market for movie-opening predictions — and it describes a 'virtual specialist': software that stands ready to buy or sell at all times, setting its own price as a function of its inventory. That is, structurally, the same idea that would later show up as the automated market maker (AMM), the mechanism underneath most on-chain token exchanges.
Filed March 25, 1996, expired on its own twentieth birthday in 2016 — years before AMMs entered the mainstream vocabulary through decentralized exchanges. The core idea was free well before the market that would make the most of it existed.
The demo below is a virtual specialist you can trade against: it always quotes both sides, adjusts its price with inventory, same as the 1996 filing describes.
Sources & further reading
Frequently asked questions
Can I use an expired or public-domain patent?
Once a patent's term ends or it lapses for non-payment, the invention it claimed generally enters the public domain and can be made, used, or sold without a license from the former owner. Separate copyrights, trademarks, or other patents may still apply to a specific product. This is general information, not legal advice.
Is an estimated date the same as a legal ruling?
No. Dates here are computed from public filing data and can differ from a patent's real status in either direction. Confirm against USPTO records before relying on one.
What does a maintenance-fee lapse mean?
US patents require maintenance fees at 3.5, 7.5, and 11.5 years after grant. If the owner stops paying, the patent lapses early and the invention enters the public domain years before its term would otherwise end.