Collateral Liquidity Share

Overview

This indicator tracks the total amount of an underlying collateral locked in an RToken in relation to the amount available in DEXs. By tracking the relationship between the proportion of a collateral asset locked in an RToken compared to the amount available for trading in DEXs, a user can identify an RToken’s bottlenecks for growth and for liquidity when exiting the token.

How can I use it?

By tracking the Liquidity Share of the collaterals backing an RToken, a user can determine the size of their deployment while managing potential slippage and trading fees when entering and exiting their strategy. If the Collateral Liquidity Share of a collateral is above 100% this means that there is more of that asset locked in the RToken than is available in DEXs for trading. If liquidity share is high, this could indicate difficulties entering or exiting the RToken because there is a lack of liquidity for the collateral on the market.