What Is JIT (Just-in-Time) Liquidity and How Is It a Form of MEV?

JIT Liquidity is an advanced MEV strategy where a liquidity provider (LP) deposits a large amount of capital into a decentralized exchange pool immediately before a large trade is executed. They then remove the liquidity immediately after the trade is complete.

This is a form of MEV because the LP exploits the knowledge of the incoming trade to capture the fees generated by that specific transaction, minimizing their exposure to impermanent loss. It is a highly sophisticated, predatory technique that siphons value from the user's trade.