Development of Pseudo Liquidity

Solving low LP issues with ease.

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 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 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 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.