The Art and Science of Native Token Liquidity

“Deep liquidity” means preserved value when trading between tokens. “Thin liquidity” means loss of value when trading between tokens.

The above discussion may make it seem like only traders should care about liquidity. In Web3, this couldn’t be further from the truth. All users interact with liquidity, as all users need to move in and out of the tokens required to interact with a token-based economy. Similarly, all protocols need to interact with liquidity as they buy/sell and le... See more

Liquidity mining is a "a network participation strategy in which a user provides capital to a protocol in return for that protocol’s native token." Just as VC funds helped subsidize marketplaces until they reached scale, Web3 protocols can bootstrap their growth using their native token.