MARKET INFRASTRUCTURE

Liquidity Pool

A smart contract that holds reserves of two or more assets, enabling decentralized trading, lending, or borrowing. Participants who deposit assets earn a share of fees proportional to their contribution.

EXAMPLE

An institutional liquidity pool for tokenized government bonds enables real-time repo without requiring a central dealer to intermediate each trade.

Relevant Roles and Functions

On-chain Role
Head of On-Chain Liquidity and Treasury
On-Chain Liquidity Strategist
Function
Blockchain-based Treasury Management
Digital Collateral
Settlement Funding across Networks
Stablecoin Liquidity
TradFi Equivalent
Central Banks
Clearinghouses
Payment Systems

Related Terms

Yield

The return generated from deploying digital assets—through on-chain lending, staking, liquidity provision, or holding yield-bearing tokenized instruments such as tokenized money market funds.

Example

Superstate's tokenized Treasury fund delivers T-bill yield directly on-chain, allowing protocols to hold yield-bearing collateral rather than idle stablecoins.

Collateral Management

The operational process of identifying, valuing, pledging, and monitoring assets used as security for financial obligations such as derivatives, repo, or margin loans. On-chain collateral management enables real-time substitution and automated margin calls.

Example

Smart contract-driven collateral management at Goldman Sachs' digital asset platform triggers automatic margin top-ups when asset prices breach defined thresholds.