In the world of finance, we have figured out great ways to securely create a financial institution by using the power of blockchain. What matters is transparency, decentralization, trustlessness, speed and security!
In any blockchain though, availability of funds in liquidity is essential for function.
To understand liquidity, let’s say there’s a house where 2 sons and 1 daughter give money every month for their parents to run the house. As in, to buy groceries, keep things well going.
Every month, everyone’s money is important. Assume that one month, the daughter is not able to give the money to her house as she spent it on a Taylor Swift concert. What would happen? Well, there would be a shortage in the house and the parents would require to cut off some costs for that month.
Now, the parents were able to make it work, but Solana wouldn’t be able to run smooth if we, the sons and daughters pull away a lot of liquidity (our money).
Here comes Meteora, a special platform that aims to never let Solana suffer from low liquidity issues. Let’s continue our story to understand what Meteora does.
Now, the swiftie in the house has made the parents want to ensure that this never happens again. So, they make a rule that everyone who contributes each month, will get extra allowance. This convinced the kids and they were more excited to pool their mone yin every month.
<aside> 💡 This helps us understand, that if humans are provided with extra incentives over the normal things, they are more likely to participate in anything.
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This is what meteora does, and, the team at meteora has 4 exciting pools with extra incentives for us web3 users to pool into.
This is special, right? We not only get extra funds, but we are also contributing towards a more secure future for Solana. Let’s get into their product offerings and understand how it works.
Dynamic Vaults are like a big piggy bank, where people could put their money and make it grow. But it wasn't just an ordinary piggy bank; it was a special one.