A quick look into liquidity providers

Quick Take

  • AMM is a logical step in the evolution of decentralized on-chain exchanges.
  • Uniswap and SushiSwap each have $4.5B+ of liquidity, which was mainly acquired through incentive programs.
  • Curve has a similar amount of liquidity but specializes in stablecoins.
  • Liquidity on Curve and SushiSwap is still backed by liquidity mining, which could complicate their existence after the Uniswap v3 launch.
Ethereum and its smart contracts have led to rethinking of what finance should look like. For example, the vast majority of popular DeFi protocols use pools as a liquidity source. Smart contracts allow anyone to become a liquidity provider (LP) on a decentralized exchange or a lender on a lending protocol by adding their assets […]

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