Definition ∞ Shared liquidity architecture refers to a system design where multiple decentralized exchanges, protocols, or trading venues can access and contribute to a common pool of digital asset liquidity. This structure allows for more efficient price discovery, reduced slippage, and deeper markets across the ecosystem. It minimizes fragmentation and enhances capital efficiency. This design benefits all participants.
Context ∞ News concerning decentralized finance (DeFi) often highlights innovations in shared liquidity architecture, particularly in efforts to improve the user experience and market efficiency. The development of such systems is crucial for increasing the overall trading volume and accessibility of digital assets. This architectural approach aims to overcome the limitations of isolated liquidity pools.