Fragmented crypto liquidity across exchanges and pairs creates inefficiencies in trading, with slippage, spread drag, and inconsistent execution impacting traders, tokens, and venues. Market makers play a crucial role in smoothing out depth, tightening spreads, and maintaining usable liquidity across venues to address these challenges. Liquidity fragmentation affects trading efficiency, pricing inconsistencies, and market health, highlighting the importance of liquidity consistency for institutional traders, exchanges, and token projects. Market makers act as a coordination layer to support healthier liquidity conditions and improve trading quality in the fragmented crypto market environment.
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