#交易流动性

1. Ensure Smooth Transactions

Without liquidity, users cannot exchange currency A for currency B, and the AMM loses trading capability.

More liquidity = deeper pools = larger trades with smaller slippage.

Meaning: Provide lower slippage, reduce price impact, and enhance trading experience.

2. The Cornerstone of Price Discovery Mechanism

Liquidity depth affects the pricing mechanism of AMMs.

In the x*y=k model, the more transactions occur, the more the price deviates from the initial state, and the more pronounced the slippage becomes.

Sufficient liquidity can maintain more accurate price anchoring.

Meaning: Form exchange rates close to the true market price.

3. Basis for LP Earnings and Incentive Mechanisms

The larger the liquidity, the more transactions occur, and the higher the fees earned by LPs.

Project teams often introduce liquidity mining to incentivize liquidity provision.

Meaning: Liquidity not only supports trading but also serves as the basis for incentive mechanisms.

For example: Currently, Alpha Trading Leader #ZKJ earns daily liquidity returns exceeding six figures; the project team can do a lot with this money every day.