How does a liquidity swap work?
Could you elaborate on how a liquidity swap operates within the realm of cryptocurrency and finance? Specifically, how does it facilitate the exchange of assets and how does it impact market dynamics, such as liquidity and price stability? What are the key players involved and what are the potential risks and benefits associated with engaging in such a swap?
Can you lose money on liquidity swap?
I'm curious, can one potentially lose money when engaging in a liquidity swap? I've heard about the benefits of providing liquidity to trading pairs on decentralized exchanges, but I'm wondering if there are any inherent risks that could lead to financial losses. Could you explain the potential downsides and what measures should be taken to mitigate them?