Liquidity Provision Model → News → Incrypthos News

Liquidity Provision Model

Definition ∞ A Liquidity Provision Model is the operational framework defining how assets are supplied to a market to facilitate trading and maintain price stability. This model outlines the incentives, risks, and mechanisms by which market makers or automated systems contribute capital. It ensures efficient asset exchange. Such models are fundamental to market functionality.
Context ∞ In decentralized finance, various liquidity provision models, such as automated market makers (AMMs) or order book systems, are continuously iterated upon. News reports often compare the efficiency and capital requirements of different models, assessing their impact on trading fees, slippage, and overall market depth within the DeFi ecosystem. These models are central to DeFi’s operational effectiveness.

$A spherical object, partially fragmented, showcases a duality. One side features a white, textured, fractured surface, suggesting data fragmentation or token supply volatility. A central metallic button could represent a governance mechanism. The other side reveals a structured, metallic framework, embodying robust blockchain architecture and distributed ledger technology DLT. Its inner core glows with blue geometric pillars, signifying transaction data streams and cryptographic primitives.$

→Developer Access SDK

→Shared DeFi Liquidity

→Asset Self-Custody

1inch Aqua Protocol Unveils Shared Liquidity Standard for DeFi Capital Efficiency

This new protocol introduces Total Value Unlocked, a primitive that eliminates capital fragmentation and drives superior, simultaneous yield across DeFi strategies.