Isolated Liquidity Pools

A Collection of Single-Asset Pools

Lynx operates with isolated, single-asset liquidity pools that act as counterparties to traders. When a trade closes with a profit, the earnings are drawn from the relevant liquidity pool. Conversely, if a trade closes with a loss, the trader’s collateral covers the loss, which is then deposited into the corresponding pool. Each pool aligns with the asset used as collateral, ensuring that profits and losses are settled in that asset. For example, a trader using ETH as collateral trades against the ETH liquidity pool, receiving or losing ETH based on their trade's outcome.

Liquidity providers can participate by depositing into any pool, earning a share of trading fees and absorbing P&L from trades tied to that pool. Lynx’s innovative system broadens accessibility, making perpetual trading more inclusive and versatile.

Lynx's liquidity pool design enables permissionless listings of collateral assets to be allowed in the future, allowing anyone to list new tokens to Lynx. Permissionless listings can be handled seamlessly behind the scenes by creating a new pool for each listed token, then automatically adding the token as a selectable option on the trading interface. Through permissionless listings, traders would no longer need to hold blue-chip assets like BTC, ETH, or DAI to trade perpetuals as trading becomes accessible to thousands of long-tail asset holders across DeFi.