How Does ‘Just-in-Time’ (JIT) Liquidity Provision Affect Slippage?
JIT liquidity provision involves a specialized actor adding a large amount of liquidity to a DEX pool immediately before a large trade executes, and then removing it right after. This temporary deep liquidity minimizes slippage for the large trade.
While beneficial for the trader, it is often associated with Maximum Extractable Value (MEV) strategies and can centralize liquidity provision.