loss-versus-rebalancing, LVR liquidity, Uniswap

Loss-Versus-Rebalancing

Loss-Versus-Rebalancing Sets a Floor on AMM Liquidity Provider Losses That Faster Blocks Cannot Remove

Loss-versus-rebalancing (LVR) costs a representative Ethereum liquidity position 471 basis points per year at Ethereum’s 12-second slot, and a jump-diffusion model of the reference price shows 125 basis points of the loss persist at any block speed. The result challenges the standard case for shorter blocks, which argues faster block production shrinks arbitrage profits against ...