Trade splitting involves dividing a large order for a digital asset into smaller, multiple orders executed at different times or across various exchanges. This strategy aims to minimize market impact, reduce slippage, and potentially achieve a better average execution price. It is often employed by institutional traders or large investors to avoid significantly moving the market with a single, substantial transaction. This technique helps in managing liquidity and price volatility.
Context
The discussion around trade splitting is relevant to advanced trading strategies and market microstructure in digital asset markets. News reports sometimes refer to sophisticated trading algorithms that utilize such techniques. A key debate involves the fairness implications of large players using these methods to optimize their execution, potentially at the expense of smaller market participants.
This research reveals how transaction reverts on rollups are not errors but strategic MEV outcomes, driven by trade-splitting and duplication, demanding protocol reforms.
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