Decentralized Finance ecosystem named ‘Defi’ is rocking the whole crypto world in 2020. The Defi market narrowly consists of a loan market comprised of interest and collateral and several derivatives and broadly refers to all trading products related to tokens. Liquidity is essential for the creation and growth of Defi markets.
Like how Mining revolutionized the early crypto world such as trade mining from Fcoin and PoW Mining, we saw that a marketplace-based approach could improve Market effectiveness and maximize incentives in the market for liquidity in crypto.
Rewards from providing liquidity
In general, providing liquidity is a complex activity that risks losing assets in catastrophic moves. Due to the risk of losing money, DEX (Decentralized Exchange) usually incentivizes users to add liquidity to pools by rewarding providers with trading fees or their own tokens.
With each liquidity providing transaction, providers will automatically receive a liquidity provider (LP) tokens such as UNI-V2 on Uniswap and BAL on Balancer. These LP tokens can track your contribution to the pool and are used for distributing their share of the transaction fees accumulated in the period that you provided
Bring Liquidity to CEX token, CLT
Centralized exchanges (CEX) have their own problems. First, they have been suspected of creating fake volume; Exchanges do this to create the illusion of liquidity. Secondly, they still host off-chain order book on a centralized server, which resulted in suspicion of price manipulation. Even though they do not have that many tradings we saw, their trading volumes are often manipulated. Therefore, these tokens have some barriers to listing on decentralized exchanges where all transactions are transparently carried out on the blockchain.
CLT team seeks to act as a bridge connecting native tokens with the decentralized exchange through their snap-shot program and Stake-snap app. They will bring ‘fully community-driven liquidity’ to CEX token through the Liquidity mining program, Staking and ILO Dapp.
They aim to provide liquidity to centralized tokens through these Liquidity mining and further development of new Defi markets.
For further information
CLT Homepage: https://cexlt.io/#Home
CLT Community: https://t.me/cexlt