Liquidity Types Explainer

May 31, 2023
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Ecosystem Project
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What is an Ecosystem Project Idea?

An Ecosystem Project Idea is an idea for a project that someone could build within the Optimism ecosystem. As opposed to an Ecosystem Concept or an Ecosystem Idea, an Ecosystem Project is generally more fleshed out and corresponds to a relatively clear product to be built.

Summary

Liquidity is an important factor for many applications. However, Liquidity comes in many different shapes and sizes. It would be highly valuable to have a detailed reference document that explains all the different ways that liquidity might be useful for a project.

Examples of possible usecases for liquidity include:

  • Liquidity for bridges that speeds up the process of moving assets between chains
  • Liquidity for lending markets that makes an asset more widely available
  • Liquidity for decentralized exchanges that reduces slippage when exchanging assets

Possible Features

  • Create a detailed list of the different ways liquidity might impact an application
  • Give examples of different applications that make use of liquidity in the listed ways
  • Describe potential ways that liquidity might be useful in the future

Impact

  • Liquidity can be confusing for those who aren't already familiar with it, this document would help reduce that gap
  • Help illuminate what type of liquidity might influence the creation of what type of app
  • More Information
  • Tag 1
    Documentation
  • Tag2
    DeFi
  • Tag3
    Consumer Apps