How can perpetual exchanges maintain continuous liquidity?
Continuous liquidity is maintained through deep order books, automated market makers (AMMs), and incentives for liquidity providers. Funding rates encourage traders to balance long and short positions, preventing imbalances. Cross-chain integrations can access liquidity from multiple networks, while insurance funds and risk management mechanisms stabilize markets during high volatility. Transparent pricing, efficient settlement, and competitive incentives attract participants and improve trading volume. Sustained liquidity ensures smoother trading, minimal slippage, and a reliable market environment for both retail and institutional traders on perpetual exchanges.
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