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What Are the Advantages for a DeFi Protocol in Incentivizing Single-Sided Liquidity Provisioning of Its Native Token?

Single-sided native token liquidity helps a protocol stabilize its price, reduce volatility, and build a loyal community.
Greeks.Live21.11.25

What Are the Advantages for a DeFi Protocol in Incentivizing Single-Sided Liquidity Provisioning of Its Native Token?

Incentivizing single-sided liquidity for a native token can be a powerful tool for a DeFi protocol. It allows the protocol to build up a large, "protocol-owned" liquidity position for its token, which can help to stabilize the token's price and reduce its volatility.

It also provides a simple way for users to support the protocol and earn rewards without having to purchase a second asset. This can lead to a more engaged and loyal community, as well as a more robust and liquid market for the protocol's token.

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How Do Protocols That Offer Single-Sided Liquidity Provisioning Manage the Risk of Impermanent Loss for Their Users?
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