A METRIC TO EVALUATE LP COMPETITIVENESS IN AMMS

Summary from the TLDR Crypto newsletter

Uniswap has introduced a new metric called fee liquidity-adjusted instantaneous returns (FLAIR) to gauge the performance of LPs in AMM pools. FLAIR takes into account the intra-pool competitiveness, considering factors like timing of liquidity deployment and rebalancing of in-range liquidity. It also helps LPs measure historical performance and strategize future capital deployments. While it's applicable to Uniswap's protocol, it can also be adjusted for traditional exchanges, offering a comparative tool to understand various market structures.