UNPORTED THIS DIFICS: CRACKTOMENSE’s LIGHTITY SUPPORTER

Since the world of decentralized finances (Defi) continues to grow and develops a new class of players who have a significant impact on the ecosystem. These are not only individuals or small businesses, but also entities on an institutional scale that provide liquidity to some of the most important names of Defi.

But who are exactly these suppliers of liquidity cryptocurrencies? And why are they so important?

What is the liquidity provider?

Liquidity provider is an entity that accepts maintenance and management of a certain amount of digital assets such as cryptocurrencies or tokens on behalf of other users. In exchange for this service, the supplier receives a rate in exchange for the provision of liquidity on the market.

In Defi, liquidity suppliers play a key role to help stabilize and regulate the price of several assets. By acting as an intermediary between buyers and dealers, they allow prices to be more stable and more efficient, which is essential for the operating and liquid market.

Why are liquidity suppliers important?

Liquidity suppliers are decisive for several reasons:

1

• Market Effectiveness : Liquidity suppliers allow faster and more efficient prices that is necessary for the market in operation.

• Risk Management : Helps alleviate the risk that acts as a counterpart to other market positions.

Who are liquidity suppliers?

Liquidity suppliers come from around the world, with some remarkable examples that include:

• KHARKEN : Replacement of Kryptomen that were associated with several important protocols.

• Bitfinex : Popular trading platform cryptomena, which provides liquidity to a wide range of markets.

• Binance : One of the largest exchanges of cryptocurrency in the world, which also invested a lot in Defi initiatives.

What are the ways they work?

Liquidity suppliers use different techniques to manage their assets and provide liquidity to users including:

• BET : They participate in parts of their assets to gain interest or remuneration.

• SALE

  : They sell their assets on behalf of other users to obtain funds for commercial activities.

• POOLY : Create groups with other investors to manage a large number of assets.

Advantages of working with liquidity suppliers

Working with liquidity suppliers can provide several benefits that include:

1.

• Reduced risk : liquidity suppliers often have lower capital requirements than traditional market manufacturers, which means that it can reduce their own risk exposure.

• Improved efficiency : can help optimize commercial processes and improve general efficiency.

Conclusion

Liquidity suppliers are unknown heroes who provide critical support for the ecosystem and allow a more efficient and stable market. Although they do not always have to receive recognition they deserve, their contributions are essential for Defi’s growth and success. When space continues to evolve, we can expect to see even more innovations from these players.

Sources:

• “What is the liquidity provider?” Cryptoslate

• “The role of liquidity suppliers in Defi” from Coindeka

• “Liquidity suppliers: Unrecognized Heroes Defi” Coindeka

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