Decentralized trading service GammaSwap today expanded to the Arbitrum Network in a move that developers say could benefit liquidity providers on the popular blockchain.
GammaSwap allows decentralized finance (DeFi) users to borrow liquidity provider (LP) tokens from automated market makers (AMMs) and “short” these LP tokens, hedging against provided collateral or creating low-risk trading strategies. Shorting is a strategy to profit from falling asset prices.
A liquidity provider is a user who commits capital to a DeFi application to earn returns from the platform. AMMs are blockchain-based trading mechanisms that eliminate the need for centralized exchanges.
A GammaSwap representative told CoinDesk that the team plans to deploy more blockchains, such as BNB Chain and Ethereum, and provide support for Uniswap LPs – which lock billions of dollars worth of tokens across thousands of trading pairs.