docs · the pieces · actupcoming
Kaihi
Named, not delivered. A liquidity pool loses value to better-informed arbitrage, a loss measured apart from the fees it earns. The piece would read that loss and the toxicity of the order flow, and move a liquidity range only when the gate commits.
In one picture
What exists today
What it does not claim
Sources
- Jason Milionis, Ciamac C. Moallemi, Tim Roughgarden and Anthony Lee Zhang (2022) Automated Market Making and Loss-Versus-Rebalancing. working paper. read in part Used for what a liquidity pool loses to better-informed arbitrage, with fees tracked apart.
- Lawrence R. Glosten and Paul R. Milgrom (1985) Bid, Ask and Transaction Prices in a Specialist Market with Heterogeneously Informed Traders. Journal of Financial Economics, vol. 14, no. 1, pp. 71-100. read in part Used for informed flow and the spread it forces.
- David Easley, Marcos M. Lopez de Prado and Maureen O'Hara (2012) Flow Toxicity and Liquidity in a High-Frequency World. Review of Financial Studies, vol. 25, no. 5, pp. 1457-1493. read in full Used for a volume-synchronized measure of order-flow toxicity.