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  3. /Liquidity Fragmentation
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Liquidity Fragmentation

The problem of liquidity being spread across many different chains, DEXs, and pools instead of being concentrated in one place.

Definition

The problem of liquidity being spread across many different chains, DEXs, and pools instead of being concentrated in one place. When liquidity is fragmented, traders get worse prices and more slippage. It's one of the biggest UX challenges in the multi-chain DeFi world.

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Related Terms

Liquidity

How easily an asset can be bought or sold without significantly affecting its price.

DEX Aggregator

A tool that searches across multiple decentralized exchanges to find you the best price for a token swap.

Cross-Chain

The ability to move assets, data, or messages between different blockchain networks.

1inch

A DEX aggregator that splits trades across multiple decentralized exchanges to find the best overall price.

Aave

One of the biggest lending and borrowing protocols in DeFi.

Across Protocol

A cross-chain bridge that uses an optimistic verification system and a network of relayers to move tokens between chains quickly.

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