Osmosis & Stride: Why a Liquidity Deal is a BAD IDEA & Price Impact is GOOD

BY Joe | Dead Cat MediaJuly 9 · video

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Disclaimer: This video is meant to inform and educate. Tokens & protocols come with inherent risks. Do your own research before buying or trading cryptocurrencies!

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Sponsors: Shadeprotocol.io & kinetix.finance

===============CHAT GPT Summary ================

The STRIDE team (liquid staking protocol in Cosmos) wants a liquidity deal with OSMOSIS (The largest DEX Cosmos) in order to increase ECONOMIC alignment.

Increasing liquidity on a DEX reduces price impact by providing more assets for trading, allowing larger trades with minimal market price changes. Higher liquidity ensures efficient order matching, tighter bid-ask spreads, and reduced slippage, resulting in fairer and more stable prices even for large transactions.

Price impact on an AMM is the effect a trade has on an asset’s price, with significant changes occurring from large trades or low liquidity. Price discovery determines an asset’s value through trading, adjusting prices based on supply and demand. High liquidity minimizes price impact, ensuring trades reflect true market value. Arbitrage traders help maintain accurate prices across platforms.

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