The elimination of various liquidity pools, including those showcasing Cardano (ADA) and the meme-based cryptocurrency Pepe, was revealed by Binance Liquid Swap, a centralised trading platform that was introduced in 2020 as part of Binance’s ambitions to corner the decentralised finance (DeFi) industry.
The choice was made in response to a recent study that aimed to “concentrate liquidity for our users and ensure optimised trading experience, price, and slippage,” per a statement from the business.
Users with positions in the impacted liquidity pools will immediately get their deposited assets in their Binance Spot wallets as of September 1 at 4:00 (UTC).
The trading of the respective pairs on Binance’s main spot market is unaffected by this change, it should be noted.
For those without a working knowledge of cryptocurrency, Binance Liquid Swap works as an automated market maker (AMM), much like well-known decentralised platforms like Uniswap and SushiSwap.
Liquidity providers deposit digital assets into pools on AMM exchanges, resulting in more stable pricing and cheaper transaction costs for big transactions. These pools have two tokens in them, and the value between them depends on how much of each token there is in the pool.
Although the move may draw criticism, it’s important to remember that the impacted tokens may still be traded on Binance’s primary spot market. The choice to eliminate certain pools is consistent with accepted industry standards, where platforms routinely review and improve their offers.
Users are now not allowed to add fresh liquidity to the affected pools, however they do have until September 1 to manually redeem their assets if they so desire.
