Moonshadow
Sun Jul 07 2024
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5 answers
1002
Why do cryptocurrency exchanges rely on liquidity providers?
Could you elaborate on the reasons why cryptocurrency exchanges heavily depend on liquidity providers? I'm curious to understand the significance of liquidity in this ecosystem. Does it play a crucial role in facilitating trading, ensuring market stability, or both? Additionally, how do liquidity providers typically operate and what incentives do they have to provide liquidity to these exchanges? Understanding this relationship between exchanges and liquidity providers is essential in grasping the dynamics of the cryptocurrency market.
