We study how high-frequency traders (HFTs) strategically decide their speed level in a market with a random speed bump. If HFTs recognize the market impact of their speed decision, they perceive a wider bid-ask spread as an endogenous upward-sloping cost of being faster. We find that the speed...

We study how high-frequency traders (HFTs) strategically decide their speed level in a market with a random speed bump. If HFTs recognize the market impact of their speed decision, they perceive a wider bid-ask spread as an endogenous upward-sloping cost of being faster. We find that the speed...

A growing number of blockchain-based decentralized exchanges have adopted automated market makers to attract liquidity, and they replace the traditional order book system for trade execution. This paper studies the equilibrium liquidity provision via constant product market makers, one of the...

Automated market makers (AMMs) are algorithms that pool liquidity and make it available to liquidity takers by automatically and algorithmically determining an execution price of a trade. In the recent markets for digital assets, a growing number of blockchain-based decentralized exchanges (DEX)...