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H2O Omnipool Dynamics: Stable Liquidity Amid Arbitrage

Opinion: They are decreasing. But since h2o is the second side of omnipool, the value of assets in the omnipool rises. Then it’s up to arbitrage bots. With small volumes of h2o sales, these fluctuations are insignificant and get buried in overall liquidity and constant trading. Large sales of h2o, in my opinion, are prohibited at the protocol level.
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Analysis

The author notes a negative selling pressure on H2O but argues that in the omnipool architecture, H2O acts as the counterparty to assets on the other side of the pool. This structure implies that over...

Recommendation

Monitor the omnipool liquidity depth and the activity level of arbitrage bots to gauge ongoing stability.Assess any changes to protocol-imposed sale limits or governance updates that could affect larg...

Disclaimer

The Analysis and recommendations provided are for informational purposes only. Any investment decisions should be made at your own risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions.

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