Single-Sided Liquidity – Becoming An LP

The decentralized markets allow users to take up roles that are usually reserved for banks and financial institutions in traditional banking systems. One way that as a user you can become a lender is by getting into single sided liquidity pools. What you can do is add cash flow to the pool in the form of tokens. In simple terms as a liquidity provider, you’re betting on the market needing liquidity of a particular token. When that happens and other users have to borrow from your liquidity pool you earn an interest rate that’s equal to the stake that you have in a particular pool. 

Are These Types of Investments Safe? 

Any investment that you make has a certain degree of risk involved in it. That being said, investing in single sided liquidity pools may arguably be a safer bet than traditional trading for example. In trading, you’re always going to be at the mercy of the market. When you’re trading cryptos it’s hard to truly find reliable indicators that will allow you to track tendencies in the market.  

With a one side liquidity pool, there’s usually a limited number of tokens that you can invest. Typically, the platforms can have a better idea of which tokens the market is going to need on a consistent basis. In a certain sense, the amount of options that you’re betting on is going to be limited to the types of tokens that a particular platform allows you to offer. 

Whereas in trading you could get lost in the hype of chasing a new coin every single day. Any investment particularly in the crypto space represents a certain degree of risk. However, there are arguably better indicators of what tokens the market could require at any given time. This can be a positive for single-sided liquidity pools.         

Using The Right Platforms To Avoid Scams 

This is a very basic thing that you need to account for. GooseFx was essentially one of the first platforms to pioneer this concept. There are other platforms that have joined into this funding possibility. Essentially in those spaces, you are going to be able to invest in single sided liquidity pools. Trying to do so outside of some of the more popular platforms on the market can be a heavy risk. Particularly with all of the phony sites that have popped up offering “access” to decentralized banking networks.  

With a one side liquidity pool, there’s usually a limited number of tokens that you can invest. Typically, the platforms can have a better idea of which tokens the market is going to need on a consistent basis. In a certain sense, the amount of options that you’re betting on is going to be limited to the types of tokens that a particular platform allows you to offer. 

The Future of Decentralized Banking? 

Could we point to liquidity to pools and say that they are the future of decentralized banking? To be honest, they are potentially the present and future of decentralized banking. The idea of allowing the user base to serve as a lender or liquidity provider to be more specific is one of the most interesting possibilities that decentralized banking has to offer. It could be said that the opportunity of becoming a crypto liquidity provider is one that massive funds are exploiting. Since being an LP in the crypto space essentially allows you to bypass the bureaucracy that you’d have to go through to hold the same position in a traditional banking system.   

With a one side liquidity pool, there’s usually a limited number of tokens that you can invest. Typically, the platforms can have a better idea of which tokens the market is going to need on a consistent basis. In a certain sense, the amount of options that you’re betting on is going to be limited to the types of tokens that a particular platform allows you to offer. 

With a one side liquidity pool, there’s usually a limited number of tokens that you can invest. Typically, the platforms can have a better idea of which tokens the market is going to need on a consistent basis. In a certain sense, the amount of options that you’re betting on is going to be limited to the types of tokens that a particular platform allows you to offer.