The Importance Of Direct Cross-Chain Liquidity Pairs

The development of the AMM model (Automated Market Maker) has revolutionized the way users trade their cryptocurrency assets. 

In contrast to traditional exchanges which make use of an order book and the traders compete for the price of the transaction, in a decentralized marketplace (DEX) that is based on the AMM model the prices are set according to an algorithm. You can find companies like Rampdefi, which provides a cross-chain liquidity transfers platform.

This is a revolution that propels the entire Defi industry to new heights by following the following method:

AMM model allows for cryptocurrencies to communicate with one another in a decentralized way which is the right direction in a society that is promoting decentralization.

It's true that the breakthrough of the AMM model is bringing crypto-world immense value and has revolutionized the rules of this sector, without which there would not be a flourishing Defi ecosystem. 

From the end of last year to today we have seen the unprecedented growth of this market segment and the amount of money locked up in Defi protocols rising to more than $150 billion on the 10th of May. 

At the moment the majority of users who have a need for swaps across chains would have to go through central exchanges that are, as previously mentioned, not without flaws, such as a grueling KYC and lack of privacy, lengthy manual procedures, double transaction costs when trading with other ERC-20 tokens. In a world that is decentralized, it is an interim solution rather than an ongoing solution. 

Cross-chain farming: For those who own two tokens on two chains, they can offer the liquidity directly by using these two tokens and begin earning without needing to do any further work.