Native Documentation
  • introduction
    • What is Native
    • About Native V2
    • Benefits for Key Players
  • SOLUTION
    • Native Credit Pool
    • Native Swap Engine
  • CONCEPTS
    • Orderbook
    • Firm Quote Orders
    • Auto Sign Orders
    • Swap Fees
    • Slippage
    • Base and Listed Assets
    • Single-Sided Liquidity Pools
    • Total Available Liquidity
    • Liquidity Pairing
    • Liquidity Bootstrapping
    • Health Ratio
    • Earning Fees and Incentives
    • Credit-Based Swap
      • Collateral Factor
      • PMM Credit
      • Settlement and Liquidation
    • Market-Responsive Pricing
    • Risks
  • USER GUIDE
    • Add Liquidity
    • Pair Liquidity
    • Claim Rewards
    • Swap with Native
  • Build with Native
    • Swap Aggregators
      • Guide
      • FirmQuote Swap APIs
        • GET Orderbook
        • GET Indicative quote
        • GET Firm quote
    • Asset Issuers
      • For Pegged Assets
      • For General Assets
  • Resources
    • Addresses
    • Audits
    • Github
    • System Status
    • Business Source License
    • Media Kit
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On this page
  • Single-Sided Liquidity Provision
  • Liquidity Pairing Mechanism
  • Liquidity Tiers in Native Credit Pool
  • Key Benefits
  • Related Concepts
  1. SOLUTION

Native Credit Pool

A Liquidity Pool Where LP-supplied Capital Fuels Credit-based Trading

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Last updated 2 months ago

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.

Single-Sided Liquidity Provision

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.

Liquidity Pairing Mechanism

Native introduces a Liquidity Pairing mechanism that dynamically allocates liquidity as needed to optimize capital efficiency, yield, and risk management.

Liquidity Tiers in Native Credit Pool

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.

Key Benefits

  • 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.

Related Concepts

  • Total Available Liquidity

  • Health Ratio