Just-In-Time Liquidity (JIT Liquidity)
Also known as: Flash Liquidity Injection, MEV Liquidity Strategy, Temporary Liquidity Provision
A DeFi strategy where liquidity is added moments before a trade and removed immediately after to capture fees or price impact.
Just-In-Time (JIT) liquidity is a trading strategy in DeFi where liquidity providers (often bots) inject tokens into a pool seconds before a trade executes, and remove it right after. The goal is to profit from the trade’s swap fees or manipulate the trade’s price impact for arbitrage. JIT liquidity relies on mempool monitoring and fast transaction execution, often using private RPCs or MEV tools. While legal and often efficient, this strategy raises concerns about fairness and transparency in AMMs like Uniswap. Some protocols are exploring ways to deter or mitigate JIT behaviors.