Read on Twitter
I am definitely agreeing with @cmsholdings here. DeFi is great and we are seeing many exciting things happening, but it can't magically make everything better.
A thread on liquidity: https://twitter.com/cmsholdings/status/1295098534266638338
A thread on liquidity: https://twitter.com/cmsholdings/status/1295098534266638338
Liquidity (in most forms, from order books to uniswap pools) is a temporary state in the middle of a big game, where every player is competing with everyone else. In a turn-by-turn sense of this game, it's almost completely zero sum.
Two big factors in the game are speed & information. A decentralized/socialized AMM (anything in a public smart contract) will never be the fastest nor can it be the best informed (since it can only use public information everyone else can see too).
A more likely outcome of a huge uniswap ecosystem is "quants" running circles around all the liquidity and picking them completely off with arbitrage. That doesn't by definition mean the quants will make more. I'd say the quants just have the edge.
This isn't set in stone, it will all depends on how the market will interact with very big AMM systems. If all traders would ditch CEX trading and move to just a few big uniswap pools we can see quants getting worried (at least they have to learn new tricks, eg. flash loans)
