I just stumbled upon the post.
We really REALLY need something like Uniswap to be implemented for SMT when they are here, preferably right away. When a new SMT is created, an account (that functions as smart contract for that SMT) without any key (just like @null) will also be created to handle swaps between STEEM-SMT and SMT-SMT. STEEM-SBD exchange should be able to be handled this way too. This way communities with their respective SMT don't need to worry about being listed on exchanges at all and able to focus on growing their community more. Order books is horrible especially for smaller communities because of the horrible liquidity (can lose 30-90% of value due to liquidity just to sell to STEEM let alone converting it to another SMT with low liquidity)
Yup... this does work better for low volume markets. It would avoid large orders completely obliterating the order book, giving an unwelcome surprise for both buyer and seller (depending on which way it goes!). Although, one downside of the model is that the constant product means that unless the prices stay roughly even in both assets, then if you choose to withdraw from providing liquidity, you are going to get a vastly different amount of tokens than what you put in... same value, just different balance!