Someone recently shared this paper with me, which rigorously studies the execution improvement of visible TWAPs on Hyperliquid: "Trading in the Sunshine or in the Shade: Market Impact and Adverse Selection on Hyperliquid," by Davide Barone and Fabrizio Lillo.
In physics, theorists can say all they want, but the case isn't closed until an experimentalist comes with the cold hard data. So thank you to the authors of this paper for their hard work! The paper demonstrates that liquidity net tightens as onchain TWAPs surface, improving the average execution of the TWAP order.
This has been a deeply personal question for me. Even before building Hyperliquid, I've defended from first principles that transparent trading ought to improve execution for non-toxic flow. This is a corrollary of the efficient market hypothesis, but the amount of pushback always surprised me. I've quote tweeted a previous post where I make the argument in detail.
Transparency and equal access bring improved execution over traditional private venues. It's an honor to build with everyone to upgrade the financial system with onchain technology.
@VitalikButerin Following your previous article, there is research about construct crypto interest rate yield curve with options , can it be the next step / use case ? https://t.co/1AQgZtK8HN
Hyperliquid, a decentralized crypto platform, is open 24 hours a day, seven days a week. The exchange has emerged this year as a go-to spot for Wall Street’s weekend warriors. https://t.co/3VCVCnxToh
Hyperliquid
A DeFi platform built on perpetual futures, now rivaling traditional exchanges.
Spot, futures, and outcome markets in one place.
US access could be the next catalyst for $HYPE
Read the full article from @LowBeta on the Stack: https://t.co/uQEUE3w35R