“The panic of ‘22 showed that much like in TradFi, liquidity and solvency are intimately bound up with each other,” said Cycles’ Ethan Buckman.
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Liquidity News
In the cryptocurrency market, liquidity fundamentally refers to how simple it is to exchange one coin for another (or government-issued fiat currencies). Order books, similar to those seen on a stock market, are one method to achieve liquidity. Here, buyers and sellers of assets enter orders, detailing the price and quantity they are willing to pay for the asset they wish to acquire or sell. The asset’s price is then determined by an exchange, such as a centralized exchange, matching buy and sell orders.
A market maker, an agent who is always prepared to purchase and sell specific assets, can be used as an alternate method of supplying liquidity to the market. For example, decentralized finance (DeFi) has centralized exchanges that serve as market makers, like Binance (a company). However, a decentralized counterpart that replaces a centralized market maker is one of the intriguing features of DeFi. For instance, tokens can be swapped using a decentralized exchange (DEX) like Uniswap rather than a centralized exchange.
Furthermore, to establish a liquid DeFi system, liquidity pools are important. In order to have enough funds in a liquidity pool, liquidity providers (LPs) are needed, who put a large sum of money into the pool. Because liquidity providers help the protocol provide liquidity, they receive a reward in return. This reward is generated by the transaction fees, which are paid by the pool’s users.
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Flare Network’s bridging technology and FAssets are bringing institutional and retail XRP holders into DeFi, tapping a massive pool of idle liquidity.
5140 - News
Over 28% of the total Ether supply is now staked, signaling that many investors are gearing up to hold their assets for the long term.
4563 - News
The project said several wallets had “coordinated a liquidity attack with an egregious malicious attempt” followed by “aggressive ZKJ sell-offs.”
2638 - Opinion
Despite crypto's rapid growth and decentralized ideals, its liquidity remains fragmented and fragile — mirroring traditional finance's hidden risks and exposing the market to sudden shocks when sentiment shifts.
3506 - Market Analysis
Bitcoin's recent rally occurred as funding rates turned negative, and BTC held on exchanges and OTC desks shrank.
27050 - News
PancakeSwap now offers one-click crosschain swaps with Across Protocol, aiming to reduce bridge risk and improve DeFi user experience across Arbitrum, Base and BNB Chain.
6526 - News
The mysterious $300 million leveraged Bitcoin long comes days after Wynn’s second $100 million leveraged Bitcoin position was liquidated, causing a near $25 million loss.
3282 - Use Case
A new generation of crosschain architecture aims to fix DeFi’s lack of coordination by aligning ecosystems rather than replacing them.
24882 - News
Bitcoin’s liquid supply has fallen 30% in 18 months as institutional demand and new reserve strategies tighten the market, Sygnum Bank reports.
14331 - Opinion
To achieve true mass adoption, DeFi must return to its P2P origins, empower people with permissionless interactions, and restore the transparency that early DeFi promised.
1699 - Market Analysis
Bitcoin hovers around $105,000, but bulls struggle with upside momentum as $100,000 comes into the picture.
14231 - News
Wynn has asked the crypto community for donations to help him fight the “market-making cabal” that he says is hunting for his liquidation.
26051 - News
Katana launched its private mainnet with support from GSR and Polygon Labs, aiming to solve liquidity fragmentation in DeFi.
9966 - News
Sui-based DEX Cetus has been hit by an apparent hack, with onchain data showing rapid asset drainage despite the team portraying the incident as a “bug.”
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