4min chapter

Flirting with Models cover image

Doug Colkitt - High Frequency Trading, MEV Strategies, and CrocSwap (S6E3)

Flirting with Models

CHAPTER

How to Charge for Toxic Flow in Uniswap

Toxic flow is basically just order flow that you don't want to be on the other side of. 99% of people, even like larger funds, whales and stuff, they're not moving the price. There's a very small percent of traders, mostly mev bots, who are extremely toxic. Almost every trade they make Uniswap is bad for the liquidity providers they're losing from that. If someone sends an order and there's some credible signal that the order is non-toxic, we can charge that order less than if somebody sends an order with no credible signal.

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