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Useful Liquidity

Useful liquidity is capital that supports trades at measurable price impact.

A pool earns liquidity quality when traders can execute meaningful size with stable quotes, clear accounting, and predictable settlement. Multiswap is built around that standard.

The metric​

Effective Depth = max trade size at X bps price impact

Effective Depth answers a direct question:

How much can this pool execute before average price impact reaches 10, 50, or 100 bps?

The ratio below measures capital productivity:

Liquidity Efficiency = Effective Depth / Total Pool Scale

A venue with stronger liquidity efficiency creates more usable market capacity from the same capital base.

Why TVL needs a companion metric​

TVL gives a balance-sheet view of deposited capital. Effective Depth gives a market-quality view of execution capacity.

Both metrics matter. TVL shows capital committed to a protocol. Effective Depth shows capital converted into usable quotes.

Multiswap focuses on the second metric because traders experience liquidity through execution.

Useful liquidity in Multiswap​

Multiswap creates useful liquidity through:

  • multi-asset pools,
  • dynamic weights,
  • explicit value-flow accounting,
  • target scales,
  • basket execution,
  • metrics based on execution quality.

The live proof phase measures these properties in production.

The sentence to remember​

Deposited capital becomes liquidity when it creates executable depth.