This episode discusses a phenomenon known as Just-In-Time Liquidity at Decentralized Exchanges. Agostino Capponi (Columbia University) explains that, while this phenomenon is generally viewed as positive for liquidity demanders, it can actually undermine liquidity provision. More specifically, JIT liquidity providers can pick-and-choose the best trades, which reduces the incentive for passive liquidity providers to offer liquidity. The consequent reduction in passive liquidity can lead to lower overall liquidity.