BIS Report: The Uniswap v3 liquidity market is still dominated by a few large participants

2024-11-20 16:48:41

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ChainCatcher news, according to Cointelegraph, the Bank for International Settlements (BIS) has released a research report analyzing the liquidity provision situation of the decentralized exchange (DEX) Uniswap v3.

The report points out that, despite being technically decentralized, the liquidity market is still dominated by a few large participants, making it difficult for retail liquidity providers (LPs) to compete with institutions.

These big players hold about 80% of the total locked value, focusing on liquidity pools with high trading volumes and low volatility. The research also found that retail LPs have relatively low trading fee earnings and investment returns, and they often incur losses on a risk-adjusted basis. BIS believes that this institution-dominated phenomenon challenges the decentralized financial system concept of DEX.

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