In this series of posts, co-written with Polina Nezlobina and Nikita Zinoviev, we discuss the main issue faced by decentralized exchanges — order flow toxicity. Other posts in this series: part two. — Introduction When the order flow is toxic, that is, dominated by arbitrageurs, liquidity providers (LPs) earn low or negative returns on their investment. We will explore the root causes of order flow toxicity and discuss potential solutions to this problem. Our discussion will mostly focus on the current market leader, Uniswap…