2026-01-07 05:21:51

Platform design done right: LPs as stakeholders, not just liquidity fuel

A better model emerges when liquidity providers aren't treated as exit targets for traders. Instead, they become real stakeholders in the exchange ecosystem.

How? LPs capture upside directly—they earn from trading volume, liquidation events, and organic market activity. The mechanism clicks because incentives actually align. When the platform thrives, LPs thrive. When traders benefit from deep liquidity, LPs benefit from increased activity.

This is the partnership approach to exchange design. It transforms the relationship from transactional to symbiotic.

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notSatoshi1971

· 01-07 05:51

Someone finally said it. Those exchanges that treat LP as an ATM are really disgusting.

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GweiObserver

· 01-07 05:51

NGL, this is the real collaboration model. Exchanges that previously treated LPs as ATMs should have reflected on this long ago.

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rekt_but_not_broke

· 01-07 05:51

Well said, finally someone has clarified this matter. Those exchanges that treat LP as an ATM will eventually suffer losses.

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JustHodlIt

· 01-07 05:46

Someone finally said it: traditional exchanges treat LPs as cash machines, and this win-win model is the right way to go.

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LiquidationKing

· 01-07 05:36

Honestly, this set of logic sounds good, but it's hard to implement... Can LP really get dividends from liquidation events? Or is it just another pie-in-the-sky design?

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