Technical Definition
JIT Liquidity (Just-In-Time)
A strategy where a bot adds liquidity immediately before a large swap and removes it immediately after, capturing the fee without holding risk.
By Crypto University Editorial
Concentrated Liquidity · Maximal Extractable Value (MEV) · Liquidity Pool · Mempool · Priority Fee
✦ Key Insight
It transfers fee income away from committed long-term liquidity providers, weakening the economics of ordinary liquidity provision.
✕ Common Misconceptions
As a liquidity provider, assuming displayed pool APR reflects what passive capital actually earns. Much of the fee on large trades may be captured by JIT bots rather than by resting liquidity.
Detailed Explanation
The bot sees a large pending trade, supplies concentrated liquidity in exactly the range that trade will cross, collects most of the fee, and withdraws in the same block. It bears almost no price exposure because the position exists for a fraction of a second.
In Practice
“A large swap arrives at a pool. A bot supplies liquidity in front of it, takes the majority of the fee on that trade, and exits before the block closes.”