This episode discusses the costs of liquidity provision at Decentralized Exchanges. Ciamac Moallemi (Columbia University) explains that liquidity providers at a Decentralized Exchange always face a loss relative to an asset portfolio that actively rebalances to match the asset weighting of the Decentralized Exchange at all times. This loss, known as Loss-Versus-Rebalancing (LVR, pronounced 'Lever'), is the primary cost of liquidity provision. Design refinements to mitigate this cost are discussed.

Ava Labs x CBER Ep 5: Loss-Versus-Rebalancing (LVR) at Decentralized Exchanges

The Crypto and Blockchain Economic Research (CBER) Forum and Owl Explains are delighted to present a transformative podcast series, "Crafting the Crypto Economy." This series features leading faculty from renowned global universities providing economic guidance regarding optimal design of various blockchain ecosystem elements. Particular focus will be given to proper economic design of tokens and of decentralized applications. This series is in collaboration with Columbia University’s Briger Family Digital Finance Lab, Columbia University’s Center for Digital Finance and Technologies, Boston University’s Digital Business Institute at the Questrom School of Business, École polytechnique and the University of Toronto Rotman School of Management's FinHub.

Owl Explains x CBER

Owl Explains [https://twitter.com/OwlExplains] is a trusted resource for educational information about blockchain & Web3 fundamentals, applications, and policy.
