I'm calling it now. Being able to take a coin and then trade it for any other coin on any other chain is going to be the future. It is probably already happening now. Imagine being able to swap your coin for any other coin you want and not have to wait for a buy order to come in. Or imagine being able to set up a pool between any two coins and then get revenue from both coins in fees. This is the where crypto is heading and it will add a lot of liquidity to the field while increases prices for a lot of coins that need to be kept in pools.
A Lot Of Pairs Means A Lot Of Coins
Rights now Eth and Tron have been doing well on the market because a lot of them have been locked in for defi. The reason Eth is going up a lot of green days of the market is because people need eth for liquidity pools. Every time they pair a coin with eth they need to lock in the same amount of eth and this means they need to buy a lot of, you guess it, eth. This leads to an upward moment in the price of the coin and as these pools grow and people don't want to take out their money this can lead to higher prices of eth. On top of that eth has a lot of side coins that can be traded for. This means more and more projects that are going to have eth pairs in the pool and more eth that needs to be bought.
Now let's expand that idea and add every single coin on every single chain. You would now be able to make pools for any cool and pair it with eth and this could lock in a lot of eth. Or you could pair any coin with Hive or Leo. The possibilities would be endless and now every coin can have an APR and be swapped for any coin.
It's Already Being Done Now Wrapped Coins
This is what a wrapped coin is in case you are new to the topic. Basically you take a coin from one chain, wrap it in the coin of another chain and then you can trade that coin on the second chain. When you want to trade the coin back to the original chain you would have to exchange the wrapped coin back to the coin on the original chain. This is all good but if we can bypass this step and just trade it would be much easier.
For more on wrapped coins check out my post of wrapped bitcoin:
@whatageek/why-wrapped-bitcoin-wbtc-is-a-big-deal
LPs are here to stay and now it is a race to see which ones will take the volume and gain the most ground. I hope to see Hive and Leo do well in that race so we can get the attention for our sites.
