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DeFi By Cointelegraph: What directional liquidity pooling does for DeFi

DeFi benefits from directional liquidity pooling

Modern Decentralized exchanges (DEXs). LP mainly rely on liquidity providers to provide tokens that can be traded. These liquidity providers receive a portion of trading fees generated by the DEX. Unfortunately, while liquidity providers earn an income via fees, they’re exposed to impermanent loss if the price of their deposited assets changes.

Directional liquidity pools are a new approach that is not used in the traditional DEX system. It aims to reduce impermanent losses for liquidity providers.