Liquidity Providers

From Minter Wiki
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Liquidus Providers are those who help sell a valuable item (coins, tokens, shares, etc.) here and now, usually buying with their own funds and later putting it up for sale. Usually the role of liquidity providers is taken over by banks, exchangers, hedge, investment and pension funds, and market-makers.

Liquidity

The term "liquidity" means the speed at which the value is sold at market price.

If, for example, the market price of an apartment is 1 million, it does not mean that it can be quickly sold for this price. Bright and clean apartments are sold faster at one price than dark and untidy ones, just as clean and washed cars are bought more often than dirty ones. It turns out that cleanliness increases liquidity and the goods start to be "in demand".

The easiest way to increase liquidity is to improve the external appeal of the product (packaging, cleaning, coloring, etc.). It also helps to advertise, correctly describe the advantages and smooth out the disadvantages.

Do not confuse "liquidity" and "dumping" - lower prices below market. Liquidity means that the seller receives the full market price of the goods, and dumping is a fast selling at a discounted price. If an apartment with a market value of 1 million is sold for 500 thousand - it is dumping, the price reduction makes the goods liquid (ie, quickly sold), but in another, lower price category.

If the product is sold quickly, it is called highly liquid, if slowly, it is called low-liquid. The market of highly liquid goods has a similar name - highly liquid market.

If a product fails to sell at all, it is called illiquid.

For example, to exchange dollars for rubles in Russia is simple and easy almost instantly, so the dollar market is "highly liquid". But selling one old tire is very difficult - as a rule, it is illiquid.

Providers

Provider is the name of a service provider. The most well known providers are Internet service providers.

Known service providers, hosting providers, payment providers. It so happens that most often the providers are called commercial organizations that provide "digital" services.

Separately, "liquidity providers" are financial organizations that provide working capital to the markets. For them, the term "liquidity" is used as a synonym for "working capital", for example, "a bank has put liquidity in the FOREX market".

Although for a long time there have been people and organizations that immediately give money for goods (exchanges, pawnshops, etc.), they received the name "liquidity providers" recently, when money and valuables were digitized.

Types of Liquidity Providers

Often the liquidity providers of the classical market are banks. They buy stocks, currencies, liabilities in their own interests and in the interests of customers. In the cryptocurrency market, banks are still poorly represented. There are crypto banks, but these are still exceptions rather than rules.

The most common liquidity providers in the market are exchangers and exchange market makers. They provide services to exchange one crypt currency for another or for fiat money (dollars, euros, pounds, rubles, etc.), exchangers buy cryptocurrencies offered by customers, market makers provide great volumes of quick deals with their own cash.

It is worth noting the role of various funds as providers of liquidity - if exchangers provide rapid transactions, the investment and other funds can provide their values (primarily dollars and euros) for a long time and regularly, ie, they, acting as buyers, provide not only speculative short-term liquidity of coins and other valuables, but also long-term high liquidity and reputation of the asset.

A separate category of liquidity providers is payment systems and gateways.

These are, for example, services that provide automated operations for online store customers. Buyer pays the gateway to the cryptographic currency, then instantly converts it into dollars or rubles and pays off the seller.

Such projects may issue their own payment cards or cooperate with electronic payment systems. Often payment gateways are the evolution of exchangers, for example, the American project Coinbase began with the sale of bitcoins and then developed into a portal with services, payment cards and aggregator of online stores.

Also providers of liquidity are intermediary services, rendering services of the third parties in exchange for a certain coin. For example, the service of buying gift cards for bitcoin and fiat and selling them for BIP is the provision of additional liquidity coin BIP.

Thus, any projects and services that are willing to exchange their own liquidity (money, rights, liabilities, etc.) into digital currency (e.g. a [[BIP] coin) are liquidity providers.

Usually they are not called liquidity providers, although they are the main liquidity providers of coins. But the term "liquidity providers" does not apply to direct providers of goods and services.

Minter Network Liquidity Providers

Minter liquidity providers can be found through their Minter Wiki pages or project directories such as WillMint.

Examples of such projects:

  1. MBank - Official BIP exchange from Minter team
  2. Exchanges and exchanges
    1. All API exchangers to Minterscan
  3. Cards and services for BIP

references

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Author of this article is Ilia
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