1/ Over the past year DeFi has been heavily colonized by HFT emigres. A lot of us come in with an arrogant attitude that we’re much smarter than the DeFi native folks. We naturally assume that however we did things in CeFi must be better. (🙋♂️I’ve certainly been guilty of this)
2/ Unfortunately I think Serum has been a victim of this attitude. AMMs have served DeFi very well. But the HFT folks behind Solana and Serum naturally assumed that limit order books must be superior because that’s how CeFi does it.
3/ CLOBs have a lot of major advantages in terms of price discovery and capital efficiency. But they’re much less resilient than AMMs. Today’s outage shows a major downside with CLOBs.
2/ Anyone with experience will tell you this just isn’t true. Even knowing this, it’s still hard to think outside the implicit bias of hard equals lucrative.
3/ I’ve seen insanely complex strategies requiring teams of PhDs, where the alpha was competed down to next to nothing. These teams persisted picking up scraps well past the point it made any economic sense.