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Liquidity Provision
Liquidity provision plays a vital role in the Lexer ecosystem since it sets the cap of the total open interest and acts as the counterparty to traders. In return, these liquidity providers are rewarded with 70% of the trading fee in addition to any potential trader losses.
As Lexer has its unique Hybrid Liquidity Engine, LPs can choose which engine to provide the liquidity to through the Smart Router.
For the multi-asset LP engines (CoreCrypto & Arbi), liquidity provision is similar to a blue-chip crypto index with a share of the trading fees and exposure to trader PnL.
For the Synthetic LP engine, there is no volatile asset risk as it utilizes stables only, and it also receives a share of the trading fees and exposure to trader PnL.
Fee revenue and exposure to trader PnL are "engine dependent", so providing for one engine will isolate the risk and rewards to the trading from that particular engine.
Last modified 21d ago