DeFi Innovation Dive. Part One: Liquidity Pools And Automated Market Makers

  1. As DeFi is one of the core use cases for the Web3 tech stack — it is important to know its inner workings and key concept to distinguish between the real things and buzzwords
  2. Liquidity is an excellent topic to develop your understanding of DeFi in general. It’s a perfect illustration of how Web3 is different and innovative.
  3. Explaining it later to your friends and family would make you look much cooler and tech-savvy than a typical NFT-bro.
  1. Create a spread inside which both parties could agree on the reasonable price of an asset
  2. Decrease the time span required for the trade to happen
  3. Provide the amount of the asset that meets the demand of both (buyers and sellers) (which technically contributes to (b) but would come up as necessary later)

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