Liquidity Provision

Providing liquidity by trading

Standard Exchange facilitates liquidity by conducting trades and performing atomic swaps on orderbooks. To incentivize traders who place new orders, Standard Exchange has a unique method of distributing liquidity provider (LP) rewards. While the liquidity appears the same to the general public, it is important for developers to differentiate these terms due to Standard Exchange's distinct algorithm.


Liveness is a concept related to the trade execution process. Uniswap, for example, provides instant finality for each trade by automatically distributing liquidity across the price spectrum from 0 to infinity. However, this approach sacrifices the efficiency of liquidity provision. Standard Exchange, on the other hand, offers greater capital efficiency for liquidity provision through automated atomic swaps. However, maintaining liveness becomes a challenge, as it is difficult to determine when each atomic swap will be finalized. Standard Exchange addresses this challenge by implementing revenue sharing and a freemium model to enhance tradiquidity in liquidity providers document.

Makers and Takers

Makers are those who submits new order in the orderbook, and takers are the ones who only matches orders in orderbook storage. To sustain an orderbook decentralized exchange, trades that make In order to guarantee liquidity, makers get following incentives:

  1. Less fees: Makers are getting less fees than takers. Fees document has details.

  2. More points: Makers get more points if they contribute to making bid-ask spread liquid in the orderbook.

Last updated