liquidity provider
A 'liquidity provider' plays a crucial role in financial markets by ensuring there is enough liquidity for smooth transactions, which is essential for market stability and efficiency.
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Definition
C1Finance
(technical)An entity that supplies capital to financial markets to facilitate the buying and selling of assets, ensuring transactions can occur smoothly.
Example
- Banks often act as liquidity providers to ensure that there is enough capital for trading activities.
C1Finance
(technical)A participant, such as a bank or brokerage firm, that offers to buy and sell securities to maintain market stability and efficiency.
Example
- The brokerage firm acted as a liquidity provider during the volatile trading session.
C1Cryptocurrency
(technical)A user who funds a liquidity pool with tokens they own to facilitate trading on a decentralized exchange and earn passive income.
Example
- By becoming a liquidity provider, she was able to earn fees from trades made on the decentralized exchange.
Similar
Terms that have similar or relatively close meanings to "liquidity provider":