1INCH · 2026-11-03 13:58 UTC

Liquidity providers explained: from TradFi market makers to DeFi pools

Article explains the role of liquidity providers in traditional finance versus DeFi, comparing how banks and market makers supply liquidity in TradFi versus how individual crypto holders do so through smart contract pools. In traditional markets, liquidity providers like Citigroup, Deutsche Bank, and JPMorgan quote bid-ask spreads; in DeFi, automated market makers (AMMs) determine prices algorithmically based on pool balances.

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