Shared Liquidity

Shared liquidity is a set-up in which multiple trading venues, apps or networks tap into a common pool of orders or assets instead of each maintaining a separate, smaller one. Deeper pools mean trades can be filled at better prices with less slippage. In traditional markets, brokers and exchanges share liquidity through order routing and networks linking their order books. In crypto, some exchange groups share one order book across several branded platforms, and DeFi apps can all trade against the same liquidity pool on a decentralised exchange. Cross-chain designs try to share liquidity across blockchains so that tokens are not split thinly between networks. The trade-offs are dependence on a single venue or pool, more complex risk controls and, where one operator serves many brands, regulatory questions about who is responsible for the trades.