Latency has long been considered as one of the most important factors affecting the market makers. Lower latency means faster responsiveness to off-chain sources where price discovery happens. Latency affects LVR that LPs lose for providing liquidity to AMMs. Higher latency can lead to greater price drift, resulting in increased LP losses. So, it is natural that latency has been used as a key selling point by many fast L1 s, claiming they enable tighter markets, leading to lower losses for market makers and LPs, ultimately benefiting end users.
Role of Cancels before Takes
Another factor for market makers, almost as important as latency, is the prioritization of ”cancels befo
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