In DeFi, there is an iron rule: liquidity attracts liquidity. Pure market maker math makes competing with an established DEX extremely difficult. STONfi controls over 60 percent of trading volume on TON, and this represents more than just numbers. It means significant influence over price formation. When so much liquidity is concentrated in one place, that is where asset prices are formed. Other platforms have to adapt or risk losing traders because of higher slippage.
It is almost impossible for a new player to change this dynamic. To compete with STONfi, you need comparable pool depth. For a 100 thousand stablecoin swap with less than 1 percent slippage, you need at least 10 million in liquidity per pair. Across 50 tokens, that amounts to hundreds of millions. But liquidity providers go where there is volume because volume generates fees. And volume goes where liquidity is. It creates a closed loop, and after 2022, funds are not willing to burn hundreds of millions in stablecoins just to break it.
As a result, STONfi has become an infrastructure monopoly, and for the ecosystem, that can be beneficial. A monopoly reduces fragmentation and can make the market more efficient. For new DEXes, the window is narrowing, and the only path may be finding specific niches or building on top of the existing infrastructure instead of competing against it.
#STONfi #Web3 #CryptoNews
It is almost impossible for a new player to change this dynamic. To compete with STONfi, you need comparable pool depth. For a 100 thousand stablecoin swap with less than 1 percent slippage, you need at least 10 million in liquidity per pair. Across 50 tokens, that amounts to hundreds of millions. But liquidity providers go where there is volume because volume generates fees. And volume goes where liquidity is. It creates a closed loop, and after 2022, funds are not willing to burn hundreds of millions in stablecoins just to break it.
As a result, STONfi has become an infrastructure monopoly, and for the ecosystem, that can be beneficial. A monopoly reduces fragmentation and can make the market more efficient. For new DEXes, the window is narrowing, and the only path may be finding specific niches or building on top of the existing infrastructure instead of competing against it.
#STONfi #Web3 #CryptoNews