Definition ∞ A Two-Sided Market Model describes a platform or network that serves two distinct groups of users who provide reciprocal benefits to each other, with the platform acting as an intermediary. In digital assets, this often applies to exchanges connecting buyers and sellers, or decentralized applications connecting service providers and consumers. The value for one group increases as the other group’s participation grows, creating network effects. Such models are common in platforms that facilitate interactions between different user segments.
Context ∞ Many successful decentralized exchanges, lending protocols, and NFT marketplaces operate on a Two-Sided Market Model, where liquidity providers and traders, or creators and collectors, depend on each other. News reports frequently analyze how these platforms attract and retain both sides of their markets, often through incentive programs or improved user interfaces. The growth and sustainability of these models are critical indicators of the broader digital asset market’s health and utility.
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