• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M

Liquidity in Ethereum Crypto Projects: Myth or Reality?

user avatar

by Giorgi Kostiuk

7 months ago


  1. Token Liquidity and Volatility
  2. Problems Arising from Volatile Tokens
  3. Consequences for Ethereum-Based Projects

  4. On paper, Ethereum-based crypto projects often have impressive treasuries, but their real liquidity can be questionable. A DeFiLIama publication found that many projects rely on volatile or illiquid tokens.

    Token Liquidity and Volatility

    While Ethereum projects may seem stable, their assets often include volatile or illiquid tokens. For example, the Luna project showed that tying a stablecoin to volatile assets can lead to disaster.

    Problems Arising from Volatile Tokens

    Projects whose treasuries consist almost entirely of their own tokens face significant risks. Such treasuries can lose most of their on-paper value in a sharp market drop, as demonstrated by the Luna example.

    Consequences for Ethereum-Based Projects

    Projects relying on their own tokens without a solid reserve currency face significant threats. A lack of stable liquidity could render treasuries almost worthless during market crises.

    Many Ethereum-based crypto projects overestimate their liquidity and stability. During market collapses, their on-paper assets can become worthless, threatening the very existence of these projects.

0

Share

Other news

MAGACOINFINANCE: Key Crypto Project of 2025

MAGACOINFINANCE finds its place among the top 2025 crypto projects, standing out with its growth potential and relevant offerings.

user avatarGiorgi Kostiuk

8 minutes ago

BlockDAG Achieves Significant Funding Growth Following Beta Testnet Launch

BlockDAG successfully raised $5 million within 48 hours of its beta testnet launch, demonstrating a significant investor interest.

user avatarGiorgi Kostiuk

40 minutes ago

Analysis of Aptos, ONDO, and Qubetics: Promising Cryptos for 2025

Aptos, ONDO, and Qubetics have established themselves as key players in the cryptocurrency world in 2025.

user avatarGiorgi Kostiuk

41 minutes ago

BlockDAG Launches Testnet Mirroring Real World Tokenomics

BlockDAG's testnet models tokenomics while Dogecoin shows volatility and Ethereum Classic remains steady.

user avatarGiorgi Kostiuk

an hour ago

Atkins' SEC Nomination Advances in U.S. Senate Committee

Atkins' nomination progresses, hinting at potential regulatory shifts for digital assets.

user avatarGiorgi Kostiuk

an hour ago

US Tariffs May Hurt Global Economic Growth, Warns Carney

Canadian Prime Minister Mark Carney discusses the potential negative impacts of new US tariffs on the global economy.

user avatarGiorgi Kostiuk

an hour ago

dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.