1) In decentralized finance automated market makers are exchanges where buyers and sellers of an asset do not need to interact directly but can buy and sell using liquidity pools. Therefore , decentralized crypto exchanges such as Uni swap or Pancake Swap rely on liquidity providers (LP) to function. Liquidity provides generally supply a pair of the currencies in the same amount and get in return liquidity tokens which are claims on the transaction fees that can be redeemed any time. The amount that can be earned by providing liquidity depends on the total transaction fees collected. A crypto investor wants provide liquidity and collects the following daily data on total transaction fees that can be collected on two of the most liquid currency pairs. USDT/BITCOIN USDT/ETHEREUM 4 7 7 11 3 9. 9. 8. 9. 7 13 a) Suppose she wants to decide, based solely on returns, in which of the markets to be a LP. a 97% confidence level . What statistical test (or tests) can she run? Run the test(s) and on her decision. How about at 90% Level. Clearly write down the statistical hypotheses. repor

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1) In decentralized finance automated market makers are exchanges where buyers and sellers
of an asset do not need to interact directly but can buy and sell using liquidity pools.
Therefore , decentralized crypto exchanges such as Uni swap or Pancake Swap rely on
liquidity providers (LP) to function. Liquidity provides generally supply a pair of the
currencies in the same amount and get in return liquidity tokens which are claims on the
transaction fees that can be redeemed any time. The amount that can be earned by
providing liquidity depends on the total transaction fees collected. A crypto investor wants to
provide liquidity and collects the following daily data on total transaction fees that can be
collected on two of the most liquid currency pairs.
USDT/BITCOIN
USDT/ETHEREUM
4
7
7
11
9.
8
3
6.
9
9.
8.
9.
7
6
13
a) Suppose she wants to decide, based solely on returns, in which of the markets to be a LP. at
97% confidence level . What statistical test (or tests) can she run? Run the test(s) and report
on her decision. How about at 90% Level. Clearly write down the statistical hypotheses.
Transcribed Image Text:1) In decentralized finance automated market makers are exchanges where buyers and sellers of an asset do not need to interact directly but can buy and sell using liquidity pools. Therefore , decentralized crypto exchanges such as Uni swap or Pancake Swap rely on liquidity providers (LP) to function. Liquidity provides generally supply a pair of the currencies in the same amount and get in return liquidity tokens which are claims on the transaction fees that can be redeemed any time. The amount that can be earned by providing liquidity depends on the total transaction fees collected. A crypto investor wants to provide liquidity and collects the following daily data on total transaction fees that can be collected on two of the most liquid currency pairs. USDT/BITCOIN USDT/ETHEREUM 4 7 7 11 9. 8 3 6. 9 9. 8. 9. 7 6 13 a) Suppose she wants to decide, based solely on returns, in which of the markets to be a LP. at 97% confidence level . What statistical test (or tests) can she run? Run the test(s) and report on her decision. How about at 90% Level. Clearly write down the statistical hypotheses.
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