Token Liquidity

To ensure protocol solvency, the single most crucial metric is maintaining sufficient token liquidity to perform profitable liquidations of unhealthy loans. Token liquidity can come from multiple sources: natively on Solana, cross-chain (e.g. WETH on Ethereum), or via centralized exchanges.

Token liquidity is measured using the following metrics:

  • Hourly trading volumes (accounting for wash trading)

  • Immediate price impact of token swaps (across a range of USD-valued sizes)

  • Price resilience post-token swap