An analysis of liquidity provision in DeFi : case of Uniswap

Abstract

This thesis analyzes liquidity provision strategies in decentralized finance (DeFi), focusing on Uniswap V3's automated market maker protocol. The research addresses the challenge of developing effective frameworks for liquidity providers operating in decentralized exchanges, where participants face unique risks including impermanent loss and strategic positioning decisions. Using empirical analysis of on-chain data, the study examines different liquidity provision approaches across various asset pairs and fee tiers to establish quantitative frameworks for strategic decision-making in DeFi markets.