Peer-to-Pool Model

In traditional order book systems, trades are matched via a central engine, which can lead to liquidity shortages and susceptibility to market manipulation. The peer-to-pool model used by AZEx offers a superior alternative:

• Counterparty Role: Liquidity pools (LPs) act as the counterparties to traders, enabling instant trade execution.

• Risk Management: Spreads, funding fees, and other mechanisms are implemented to mitigate risk.

• Incentives: Liquidity providers earn a share of transaction fees, ensuring a stable liquidity supply.

This model offers better resilience against manipulation and enhanced market stability, particularly in volatile markets.