> For the complete documentation index, see [llms.txt](https://hikarilabs.gitbook.io/hikariswap-documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://hikarilabs.gitbook.io/hikariswap-documentation/use-cases/development-of-pseudo-liquidity.md). # Development of Pseudo Liquidity Most token projects nowadays start grassroots on their desired blockchain, seeded with not more than 1 or 2 ETH LP on Uniswap unless it was a larger presale. A benefit of low liquidity is that its relatively easy to get a higher market cap because of how the AMMs are structured. However, its also relatively easy to create sharp drops in price because selling tokens means drawing the base currency from the LP pool. So as a baseline, lower initial LP means increase volatility. Most projects of this aptitude fail, however the ones that succeed and grow astronomically will have a few overarching problems in the future: 1. Thin Liquidity 2. Large whales The thin liquidity can be solved by the community or the team by simply adding to the liquidity pools for the respective tokens. This tends to be -EV as LP partipants will not enjoy the same upside compared to holding the tokens only. Many times, these LP positions will suffer significant [impermanent loss](https://academy.binance.com/en/articles/impermanent-loss-explained) from the differing ratio of the pools. If no one is incentivized to provide LP positions into the pool, how can you solve the liqudity crunch? ## HikariSwap's Solution HikariSwap's [OTC pools](/hikariswap-documentation/hikariswap/otc-pools.md) and algorithms provide pseudo liquidity to projects that have rooted with low LP. OTC allows larger orderflow to be sent out only by looking the spot price instead of the LP that it is associated with to give a different view of project value that goes beyond what they had seeded liquidity for. Our [Execution Algorithms](/hikariswap-documentation/hikariswap/advanced-trade-algorithms.md) also create two bands of buy side and sell side flow (if used properly) can provide a pseudo liquidity band for buyers and sellers to be able to access. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://hikarilabs.gitbook.io/hikariswap-documentation/use-cases/development-of-pseudo-liquidity.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.