Liquidity is a concept that pops up often in the world of finance, and it’s just as important in the Web3 space, especially with the rise of decentralized finance (DeFi). In simple terms, liquidity refers to how easily you can buy or sell an asset like a cryptocurrency, without drastically changing its price.
To put it in everyday language, imagine you’re at a market selling apples. If there are plenty of buyers ready to purchase your apples at the current price, then your apples are more “liquid.” You can sell them quickly, and you don’t have to drop the price to attract a buyer. However, if there are only a few buyers, you might have to lower the price or wait a while to sell your apples. In that case, your apples are less liquid.
Sellers and buyers are both necessary for any market to work effectively; the concentration of each of them influences the market in many different ways.
In Web3, liquidity applies to digital assets like cryptocurrencies and tokens. High liquidity means people can trade their tokens quickly, while low liquidity means it’s harder to find someone to trade with, and you may need to wait longer or accept a worse deal.
Why is Liquidity Important in Web3?
Liquidity plays a big role in how smoothly decentralized markets and applications function. Here’s why liquidity is crucial in the Web3 world:
Efficient Trading: High liquidity means you can easily trade your tokens without slippage (the difference between the expected price of a trade and the actual price). If liquidity is low, prices can swing drastically after each trade, creating an inconsistent and unpredictable market.
Fair Prices: In liquid markets, prices tend to be more stable and reflective of real value. With low liquidity, even small trades can cause big price movements, making it harder to predict what you’ll pay or receive for a token. This is why with tens of thousands of altcoins in existence, the vast majority of them have proven so volatile from one day to the next.
User Experience: Web3 applications like decentralized exchanges (DEXs) need liquidity to offer fast and reliable services. If liquidity is low, users may experience delays or unfavorable prices when trading tokens, which can discourage participation in that exchange. For a decentralized exchange like Uniswap to compete with a centralized (privately owned) exchange like Coinbase, liquidity is used to create equally convenient trading activities for users.
How Does Liquidity Work in Web3?
In Web3, liquidity typically comes from two main sources:
Liquidity Providers (LPs): In decentralized finance (DeFi), liquidity often comes from regular users who deposit their crypto into a liquidity pool. These users are called liquidity providers. By contributing their tokens to the pool, they help create liquidity, which allows others to trade. In return, liquidity providers earn rewards like a share of the trading fees. Typically, a liquidity provider contributes to a liquidity pool by providing an equal-value amount of both tokens involved in that exchange pairing.
Liquidity Pools: A liquidity pool is a smart contract that holds funds to facilitate trading between different cryptocurrencies on a decentralized exchange. For example, if someone wants to trade Ether (ETH) for a stablecoin like USDC, the liquidity pool allows them to do so without needing a direct buyer or seller. The more funds in the pool, the easier and quicker trades can be made.
Think of liquidity pools like communal pots of money that people can use to trade tokens with each other. The bigger the pot (more liquidity), the easier it is for everyone to trade, and with larger amounts at a time.
Examples of Liquidity in Web3
Uniswap and Liquidity Pools: One of the most popular platforms in DeFi, Uniswap, allows users to swap between different tokens by tapping into liquidity pools. Users provide liquidity by depositing pairs of tokens (like ETH and USDC) into the pool. In return, they receive a percentage of the fees generated when other users make trades.
Stablecoins as Liquid Assets: Stablecoins like USDC or DAI are often considered highly liquid because they are widely used and can be easily exchanged for other tokens. Their prices are stable, which makes them ideal for providing liquidity in many DeFi applications.
NFT Liquidity: Liquidity doesn’t just apply to cryptocurrencies—it also applies to NFTs (non-fungible tokens). Some platforms are experimenting with ways to create more liquidity for NFTs by letting users fractionalize them, meaning they split the NFT into smaller pieces that can be traded more easily.
Liquidity Mining and Yield Farming
In the Web3 world, liquidity mining or yield farming is a way that people are incentivized to provide liquidity to a decentralized platform. Essentially, liquidity providers earn rewards, usually in the form of extra tokens, for depositing their assets into a liquidity pool.
For example, if you deposit your crypto into a liquidity pool on Uniswap, you may receive Uniswap’s governance token ($UNI) as a reward. This is a reward incentive, a way to encourage more liquidity, keeping decentralized exchanges running smoothly.
Why Liquidity Matters for Web3 Projects
For Web3 projects to thrive, they need liquidity. Without it, users would struggle to trade tokens or interact with decentralized applications (dApps). Here are a few key reasons why liquidity is critical:
Smooth Functioning of DEXs (Decentralized Exchanges): DEXs rely heavily on liquidity pools. Without enough liquidity, users can’t easily swap tokens, which disrupts the whole system.
Trust and Adoption: High liquidity signals trust in a project. If a project has deep liquidity, more users are likely to join, trade, and use the platform. On the other hand, low liquidity can deter users because they may worry about the stability and usability of the platform.
Price Stability: More liquidity means token prices are more stable and less likely to be affected by large trades. This creates a healthier market and attracts both casual and serious investors.
Common Liquidity Terms in Web3
Liquidity Provider (LP): A user who contributes tokens to a liquidity pool to facilitate trading on a decentralized exchange.
Liquidity Pool: A smart contract that holds tokens to enable decentralized trading between two or more cryptocurrencies.
Slippage: The difference between the expected price of a trade and the actual price. High slippage happens in low-liquidity environments.
Liquidity Mining/Yield Farming: The process of earning rewards for providing liquidity to a platform or decentralized exchange.
Impermanent Loss: A potential risk for liquidity providers. This occurs when the price of the deposited tokens changes compared to when they were deposited, leading to lower value when they’re withdrawn.
The Lifeblood of Web3
Liquidity is crucial to making decentralized platforms work efficiently. Whether it’s enabling quick and cheap token swaps, stabilizing prices or collecting rewards through liquidity mining, liquidity plays a huge role in Web3 ecosystems.
For those new to the Web3 world, understanding liquidity can help you make better decisions when participating in DeFi platforms, trading tokens or even providing liquidity yourself for passive rewards.
There is more to $TREZ than meets the eye. It’s coming. To make sure you get as much as you can, play each of the following tap-for-rewards games on Telegram every day:
Since the early days of Gala Games, we knew that web3 tech would change the entertainment ecosystem forever, adding layers of ownership and rewards to the things we already do for fun.
It was natural for this revolution to start with gaming, as web3-enabled video games are the easiest to understand example of the power of blockchain in action. Players were previously forbidden from owning their in-game loot and even punished for trading it with others; they are now encouraged to do so.
Before, everything a gamer put into their favorite game was locked to their account forever. When they eventually found a new favorite game (it definitely happens) they would have to say goodbye to everything they accumulated in all their time playing their original favorite. Blockchain made a better way, giving gamers an unprecedented opportunity to essentially take it with them.
When you actually own the sword you’re swinging, the land you’re farming or the power-ups you’re hoarding, you have the freedom to maintain their value and play on your own terms, even if that means leaving to play somewhere else. Thus, freedom is the most important and empowering value of the web3 movement. We’re here to empower you with freedom.
Evolution of Web3 Gaming
Gamers worldwide still have mixed reviews of web3 functionality, mainly because they do not fully understand the freedom it offers. Through the evolution of blockchain gaming over the past few years, many experiments have been conducted and lessons learned, bringing the gaming world closer to the a-ha moment that will make the truth of web3 clear to the worldwide community of gamers.
We’re very excited about the rise of a new generation of web3 games, powered by the unlikely combination of Telegram and its mini-app ecosystem with The Open Network (TON) blockchain. As one of the most popular messaging applications in the world, Telegram began tackling the responsibility of bringing web3 to the masses with a level of success no one else in the industry has seen. Basically, Telegram has transformed into a champion of web3.
Telegram cracked the code, understanding that empowerment for web3 gamers is all about simplicity and rewards, at least at this stage in its evolution. The growing ecosystem of tap-for-rewards games are mindlessly fun to play, with no external apps to download and plenty of rewards to collect.
$TREZ – A Movement in Player Empowerment
After watching the success of early pioneers in “tapper-style” web3 gaming, Gala crafted a plan and dived in head first, creating our own ecosystem of tap-for-rewards games centered around a reward token called $TREZ.
$TREZ is the core reward token for these games. It will soon begin distribution on a daily and seasonal basis, and the amount of $TREZ a player can receive in these distributions is proportional to their activity in the various Gala tapper games.
Launch dates and initial distribution dates for $TREZ have not yet been announced, so you still have time to secure your rewards by playing these games.
$TREZ will be an actual GalaChain-based cryptocurrency that can be swapped for $GALA on GalaSwap right from the start.
Learn more about the plans for $TREZ distribution in the $TREZ Litepaper, and follow Benefactor’s Channel in Telegram for all the latest updates as they become available.
Empowerment in Numbers
All Gala’s Telegram mini app (tApp) games are 100% free to play. There are no in-app purchases (other than those which spend in-game reward coins). Instead, a variety of tasks will give you opportunities to enhance your $TREZ rewards. These tasks will lead new users to the broader Gala ecosystems, where they are rewarded for creating free accounts and interacting with our platforms in various ways.
Telegram has nearly 1 billion users throughout the world (that’s a lot), and the vast majority of them still haven’t experienced the empowerment of web3. This means we’re now tapping into a massive new audience, leading them to not only the Gala ecosystem, but web3 as a whole. “Mass adoption” has so often been seen as the holy grail of web3 – This is because web3 is all about the power of participation. The more people, the more empowering it is for everyone.
We’re thrilled to invite you on this revolutionary journey of ownership and rewards with us. Look for more announcements about $TREZ coming soon, and in the meantime, play the games. You’ll be glad you did.
🐾Get your paws ready, because our latest Telegram mini app game Gala Meow Coin has just dropped! 😻
Part of the epic $TREZ ecosystem, this purr-fectly crafted tapper game lets you tap, collect and claw your way to the top. Whether you’re a die-hard degen or just a sucker for adorable kitties, Meow Coin is the next level of fun (and FOMO).
Who Can Play?
Like all our Telegram mini app games, anyone with a free Telegram account can play as much as they want, 100% free! You don’t even have to download anything– the game is launched right through Telegram with the help of the most adorable Gala Meow Coin Bot!
How it Works
🐱 Tap your way to the top: Complete quests, tackle tasks and upgrade your kitty power. 😸 Bring your fur-ends: Invite your friends for extra in-game coins and rewards! 😸 Chase the leaderboard: The most dedicated tappers will secure prime spots, giving them a chance to claw into that juicy daily $TREZ distribution!
With every tap, you’re setting yourself up for serious rewards once $TREZ hits the scene. That’s right, your Meow Coin game stats will factor into the initial $TREZ seasonal distribution. So, don’t snooze like a lazy cat—get tapping and collect those in-game coins while the rest of the litter watches in envy. 🐾
You don’t want to be the last cat in line when the $TREZ rewards start flowing. Ready to dominate? Or are you going to let the other cats lap up all the cream?
The conclusion of Season 6 has come… congratulations to all the victors!
As Captains across Elysium tend to their wounds and gather their forces for the next battle, let’s take a moment to appreciate the successes of the past before we focus on the struggles of the future.
Need a refresher on starting out? Check out this guide to getting your best foot forward right away in a new season:
The battle for Elysium is long, and many Captain’s strategies will fall short of victory. Still, there are those that persist and triumph. The few rise to the top to gain Elysium’s true power!
Total $ETIME in seasonal rewards: ~926k
Battle Power — 20% of Season Rewards
Think you’re powerful? How did your overall effort stack up against the other Captains?
Hello World
DubstepRod
Sydney
Elof
beckoned
Arena — 20% of Season Rewards
No soldiers, no resource management… just battle. Did the arena lead you to glory or defeat?
DubstepRod
OwO
Tired
CaptWusl
Mr.Geologist
Conquest — 60% of Season Rewards
This is what you all prepared for. The great battle that pits guild against guild, Captain against Captain. Was your battle for The Ring successful?
Elof
Jeryyyyy
HelloWorld
Inywer
LordHeLL
Especially Honorable Mention
This season only one player achieved top 10 in all three rankings…
Congratulations to DubstepRod! At 6th in Conquest, 1st in Arena and 2nd in Battle Power, DubstepRod dominated the leaderboards this season!!!
EDIT: We actually have another rank dominator… Elof! Elof changed their name to “Tired” at the end of the season… and who couldn’t blame them for being tired… 1st place in Conquest, 3rd place in Arena and 4th place in Battle Power.
“Tired” at 3rd place in the Arena is, in fact, Elof! This means they too were an overwhelming force in this season… we salute them!
Check your final rankings in the following table! Shown are top 100 in Conquest and Battle Power and the top 50 in Arena!
In season 6 we saw epic battles, unexpected outcomes and a new level of competition never before seen in Elysium. The battles that will come in Season 7 are up to the Captains who fight them… but if the escalation of the past is any indication, we’d expect to see more intense confrontations for power.
Unlike some previous seasons, Season 6 brought four guilds in the top of the Conquest ranks that were actively competing for the win. Fierce competition yields major fun… who will rise to the top next season? Will we see a new power rise to challenge The Ring, or will the rulers of previous seasons come back fighting and dominate Elysium once again?
Season 7 brings an all-new Mercenary, new season features and season Mercenaries, and above all else an entirely new chance to claim The Ring.
Keep an eye on Discord in the first week for daily codes… you’ll need supplies to get your war started.
We’re not going to dive into the seasonal meta until you get a chance to hop in the game in the next hours. Stay agile in your tactics… you have no idea how a new Mercenary or new meta will affect your strategy. Those who capitalize on these opportunities are often among the victors.
Good luck in your coming battles Captains… and thank you for an amazing Season 6!
Don’t forget to update your game before Season 7’s launch at 5pm PT!
Gala Music is thrilled to announce the launch of the LabelRadar & Gala Music “NextUp” Contest, an exciting competition for emerging artists to showcase their talent and make their way into the web3 music world!
Partnering with LabelRadar, Gala Music invites aspiring musicians to submit their original tracks for a chance to win cash prizes, Mystery Box track features, professional music production software packages and a 5% revenue share for Mystery Box sales!
Submission Details
Open Date: Tuesday, Sept 24, at 12pm PT
Close Date: Sunday, Oct 13, at 11:59 pm PT
Eligibility: Artists must be at least 18 years old to enter
How to Enter
Artists can submit their original tracks via this Gala Music landing page, which will guide them to the submission portal, powered by LabelRadar. If you’re an aspiring artist, this competition is an incredible opportunity to elevate your music and gain exposure to Gala Music’s extensive fanbase.
Judging Process
Well-known artists Macy Gray and PLS&TY, along with key members of the Gala Music staff, will serve as judges to select the top 10 submissions. Each selected artist will then be asked to create a Gala Music Artist Profile and submit their track for release, which will then enter them in the NextUp Voting System.
Voting & Prizes
The top 10 artists will battle it out to become the community favorites, encouraging their supporters to vote for them on the Gala Music platform. Every account gets a free weekly vote, but users can also spend $MUSIC to unlock additional votes.
NextUp voting on Gala Music will last for one week, opening on Friday, October 18th at 12pm PT and closing on Friday, Oct 25, at 12pm PT.
Top 5
The top 5 artists with the most votes will each receive $1,000 and their song will be featured in a special NextUp Mystery Box, slated for release in November. These songs will become Gala Music exclusives indefinitely, with winners also getting a chance to share in the revenue generated from Mystery Box sales.
Final 3
Additional prizes for 1st, 2nd and 3rd place vote counts will include music production software packages from leading music brands such as GForce, Ujam, Ace Studio and more.
The 1st place package is valued at ~$5200. The 2nd place package is valued at ~$1980. The 3rd place at ~$1380.
Don’t miss out on this unique chance to break into the industry and get discovered! Submit your track now and be the next rising star on Gala Music.
