About this document
Liquidity Fragmentation On Decentralized Exchanges by yfeodorovich is a document available to read on EtoBox.
This study examines liquidity fragmentation on decentralized exchanges, particularly the effects of fixed transaction costs on liquidity providers (LPs). It finds that small LPs are more affected by these costs, leading to a concentration of liquidity in high-fee pools despite their lower trading volume. The analysis of Uniswap data reveals that large institutional LPs dominate low-fee pools, while small retail LPs gravitate towards high-fee pools, accepting lower execution probabilities to manage costs.
- Author
- yfeodorovich
- Language
- EN