The Bank for International Settlements (BIS) revealed that institutional players dominate liquidity provision on decentralized exchanges (DEXs) like Uniswap. The report analyzed the behavior of sophisticated and retail participants in Uniswap v3’s liquidity pools, highlighting how institutional players replicate traditional finance strategies to gain a competitive edge. Retail participants struggle to compete due to their lower skill and less frequent adjustments to market conditions. The findings suggest a gap between the ideal of inclusivity in DeFi and the reality of institutional dominance.
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