Fixing Crypto’s Liquidity Problem Will Boost Adoption

PYMNTS asked business leaders for their take on how to plan for the rest of 2023, and what they are telling their teams to focus on. Dr. Yan Zhang, CEO at Airswift, said the Airswift/Pelago team is working on building up a crypto liquidity pool designed to increase the liquidity available for facilitating payments.

Amid positive sentiments on the future of crypto, the industry now faces the challenge of fixing its worsening liquidity problem. The failures of exchanges and lenders such as FTX and Genesis have frozen the market and prompted people across the crypto landscape to seek withdrawals. The absence of liquidity behind these failures has been evident in crypto for a while, but the situation was worsened by contagion coming from traditional financial markets, which have been experiencing their own issues.

With this issue in mind, the top focus of the Airswift/Pelago team this year is building up a crypto liquidity pool designed to increase the liquidity available for facilitating payments, which will only increase crypto’s attractiveness as an asset class overall and widen its appeal among investors. Pelago is a decentralized payment protocol that lets merchants accept digital assets easily via a liquidity pool. In order to reduce the complexity of fund aggregation and payment transfers, Pelago has developed an industry-first liquidity pool model that’s purpose-built for payments. Liquidity providers who contribute any single crypto asset to Pelago’s liquidity pool profit from each transaction that uses their contribution to the pool, without any impermanent loss.

We are also emphasizing the need to ensure that our procedures are compliant, so our solutions incorporate a mix of human expertise and automation. The Pelago protocol is fully computerized, leaving no space for human manipulation in the payment process. However, our team of experts handles on and off ramps in order to provide a smooth, integrated service. We work with world-class, authorized providers to ensure that our clients face no compliance risk, and their funds are safely handled.

With crypto rallying this past quarter despite turmoil in traditional finance, the market has proven its resilience amid regulatory challenges and market turbulence. As the Airswift/Pelago team continues to work on building a liquidity pool, we hope to address crypto’s liquidity problem and ensure that Web3 payment transactions are both efficient and compliant. By offering a streamlined and secure payment protocol, we believe that Pelago will contribute to the wider adoption of crypto, and help unlock the full potential of this promising asset type.