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Keen on discovering alternative crypto investment strategies to buying and HODLing your cryptocurrencies? With the Uniswap v3 update, providing liquidity is the latest investment strategy to gain the spotlight. From concentrated liquidity to NFT Liquidity Provider (LP) tokens, your options for how you want to provide liquidity have truly opened up, thanks to this new focus on leveraged liquidity provision. That said, there’s no project that takes better advantage of this newfound automated market maker (AMM) efficiency than Izumi Finance. As a platform solely focused on solving common Uniswap v3 issues, Izumi Finance rewards users by efficiently distributing rewards. To learn how Izumi Finance and IZI tokens will change how the average crypto investor understands liquidity, read on, as this article includes everything you’ll need to know about the future of Liquidity as a Service (LaaS).
Izumi Finance is a financial platform which provides Liquidity as a Service with Uniswap v3 and a built-in multi-chain decentralized exchange. Izumi Finance proposes innovative liquidity mining protocols to attract liquidity efficiently by distributing incentives in certain price ranges.
Decentralized exchanges (DEXs) like Uniswap and PancakeSwap have undoubtedly changed the way crypto enthusiasts trade and invest. Unfortunately, drawbacks like low liquidity and high slippage have prevented DEXs from fully overtaking their centralized counterparts. However, platforms like Izumi Finance and its liquidity mining scheme, LiquidBox, are designed to solve two core DEX problems: incentive inefficiency and the Pool 2 dilemma.
One way that Izumi Finance’s protocol solves incentive inefficiency is its concentrated liquidity mining model. The protocol achieves this with its fixed reward price range for stablecoins and pegged assets. By evaluating the total effective liquidity in the price range, and assigning incentive linearly according to the proportion held by each LP, slippage inefficiencies are minimized and liquidity is gained at this price range.