At its core, a liquidity pool is a smart contract protocol that contains a reserve of funds used to facilitate decentralized trading, lending, and other financial activities within the crypto market. These pools are integral to the operation of decentralized exchanges, providing the necessary liquidit...
In order to solve this problem, several plans have been made to “concentrate liquidity” around a certain price. Curve made the Stableswap AMM, and all of the liquidity in the pool is centered around a single price, which is often equal to one. In the meantime, Uniswap v3 made the Rang...
Liquidity is a term used in the financial world to refer to how easilyan asset can be bought or sold. Liquidity crises occur when the markets for various assets freeze up, making it hard for businesses to sell their stocks and bonds. In such a scenario, the demand for liquidity incre...
Locked liquidity refers to the process of securing funds—typically in the form of liquidity pool (LP) tokens—in a tamper-proof smart contract for a specified period. Liquidity is the lifeblood of any token trading on a decentralized exchange (DEX), and locking it ensures that these funds re...
Curve is the primary DEX for trading stablecoins. As one of the largest DeFi platforms, it has nearly $16 billion dollars in its ecosystem. In order to trade stablecoins, Curve runs on liquidity pools. Because stablecoins are meant to keep their same price, stablecoin yield farming is gener...
The liquidity pool consists of two primary components: the base currency and the quote currency. The base currency represents the cryptocurrency being traded, while the quote currency is the token used as a reference for determining the value of the base currency. For example, in a liquidity poo...
Although DeFi lending is an ideal solution for many users, it isn’t without risk. Many lending protocols require users to lock their funds in a liquidity pool, making them susceptible toimpermanent loss. Flash loans, a type of loan in which funds are borrowed and returned within the same ...
Liquid Staking: Rewards/Liquidity for staked assets (e.g., Lido Finance, Rocket Pool) Derivatives: Smart contracts that get their value, risk, and structure from an underlying asset (e.g., UMA, Synthetix) Payments: Protocols that give the ability to pay in the form of digital assets (...
Lending/Yield Farming:There are hundreds of defi apps available that provide lending. Generally, they operate the same way as a liquidity pool, where users lock their funds in a pool and let others borrow them, receiving interest on their loans—called yield farming. Many provide flash loans,...
However, in this token offering investors do not lock their tokens directly but stake them in a DeFi Liquidity Pool to gain LP tokens. In the next stage, the investors lock their LP tokens and receive the IFO token while the other token is burned. Some changes added to IDOs could be in...