LVR-minimization in Uniswap V4 - Decentralized exchanges - Ethereum Research

This research has received funding from the Uniswap Foundation Grants Program. Any opinions in this post are my own. The long-anticipated release of Uniswap V4 29 is upon us. This blog post sketches a straightforward combination of a singleton pool and hooks within the new V4 framework to tackles cross-domain MEV at the source: the block producer, or searchers paying for that privilege. Recently, I’ve been doing research on cross-domain MEV sources within the DEX ecosystem, and it almost always came back to the same term: Loss-versus-rebalancing or LVR. LVR put a name to the face of one of the primary costs incurred by DEX liquidity providers. Block builders on any chain are being goose-stepped into profit-maximizing machines. To do this requires a knowledge of the most recent state of the primary exchanges and market-places. Typically, these take the form of centralized exchanges and other large-volume DEXs, not to mention the swaps in the mempool (discussion for another post). The fi

saved by

• Beth Wang