Native Credit Pool
A Liquidity Pool Where LP-supplied Capital Fuels Credit-based Trading
Last updated
A Liquidity Pool Where LP-supplied Capital Fuels Credit-based Trading
Last updated
Native Credit Pool is a unified, single-sided asset supply pool that enables market makers to borrow assets for trading, thereby enhancing liquidity in the on-chain spot market.
With a single-sided liquidity model, liquidity providers are no longer constrained by pair-based deposits and suffer the impermanent loss. Assets are borrowed and returned exactly as deployed, along with accrued credit interest.
Native introduces a Liquidity Pairing mechanism that dynamically allocates liquidity as needed to optimize capital efficiency, yield, and risk management.
Assets added to the Native Credit Pool are categorized into three distinct tiers:
Smart Pairing Liquidity: Utilized for all trades with the higher yield and lowest risk. Provided primarily by retail liquidity providers (LPs).
Dedicated Pairing Liquidity: Used specifically for trading the dedicated token. Provided by both retail LPs and asset issuers.
Bootstrapping Liquidity: Acts as a buffer fund, utilized for all trades to ensure liquidity stability and credit-based trading. Provided by market makers.
Tiered Risk Management: Liquidity is allocated across risk tiers, ensuring tailored exposure for LPs and optimal capital deployment.
Dynamic Liquidity Allocation: Assets are allocated intelligently to meet trading demands, offering smart yield opportunities for liquidity providers.
Cost-Effective Capital Deployment: Asset issuers benefit from efficient capital allocation and optimized incentives for liquidity provisioning.
