CEX Daily Combo 29 December 2024

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Task:  "Liquidity Pools in Crypto: A Party You're Actually Invited To"

1. Why do centralized exchanges partner with liquidity providers?
✔️ To maintain smooth trading during market peaks

2. What is one key difference between centralized and decentralized liquidity systems?
✔️ Centralized exchanges use order books, not liquidity pools

3. What is the main advantage of centralized exchanges for traders?
✔️ Guaranteed stability and speed for trades

4. What is impermanent loss?
✔️ A risk specific to decentralized liquidity pools

5. What is the purpose of an Automated Market Maker (AMM)?
✔️ To facilitate trades in decentralized liquidity pools

6. What is the main takeaway about liquidity systems in crypto?
✔️ They keep trades flowing and prices stable

7. What makes centralized exchanges reliable during high market volatility?
✔️ Their partnerships with liquidity providers

8. Who are liquidity providers?
✔️ People who deposit tokens into liquidity pools

9. What is a liquidity pool compared to in the video?
✔️ A swimming pool filled with crypto tokens

10. How do centralized exchanges match trades?
✔️ By matching buy and sell orders in an order book

11. What system do centralized exchanges like CEX.IO (http://cex.io/) use for liquidity?
✔️ An order book system

12. What is the role of liquidity providers on centralized exchanges?
✔️ To ensure there’s enough crypto available for trades

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