
liquidity provision
Liquidity provision involves financial entities, like market makers or investors, supplying assets (such as stocks or cryptocurrencies) to markets to ensure smooth trading. By consistently offering to buy and sell these assets, they help maintain stable prices and enable other participants to trade quickly without significantly impacting the market. Essentially, liquidity providers act as intermediaries that facilitate efficient and reliable transactions, reducing price volatility and making markets more accessible and efficient for everyone involved.