Liquidity Borders Are Hurting Cross-Chain Capital. Are They Necessary?
As the Web3 ecosystem continues to grow, explore, thrive, and evolve, we are treated to many new services, products, and experiences. This is all well and good, but not without its growing pains. The very best aspects of Web3, including its decentralization, freedom without borders, community-defined governance, and more, are driven by the same mechanisms that create limitations. The ability for anyone to build a chain and launch an ecosystem is amazing. The fact that there are few solid connective tissues between these chains can make for a massive headache, or even worse, security risks.
The result of all of these amazing innovations, and their downside counterparts, is that we’ve developed not one sprawling marketplace that is Web3, but rather a growing number of Web3 “bubble” marketplaces. Yes, they can be (and often are) connected to each other via bridges, wrappers, or other elements. But each new piece of infrastructure is a piece of development, a struggle to ensure common languages in both code and syntax, and the need to be ever-vigilant for new weaknesses and threats. After all, bridges have not held a great track record in the Web3 community for their ability to guarantee the safety of transactions.
These unintended bubbles have other consequences as well. One of the most frustrating of these consequences are the liquidity silos that are created from these disconnected bubbles. The natural barriers of decentralization have created the opposite of a free-flowing market. Instead, they have built up inefficiencies, opportunities for bad actors, and an overarching reputation hit for Web3 as a whole. So what can be done about these liquidity silos, and how do we pop these bubbles so that liquidity can flow? Let’s dive in to explore the problem and possible solutions including a promising example of Calyx and its recent token sale, where 11 different chains participated, allowing users to join the sale using almost any chain or token they hold.
Why Do Liquidity Silos Exist?
The first step to solving any problem is understanding it. Liquidity silos aren’t new in Web3, but they are fundamentally stubborn. At its heart, what we call “Web3” is really a loosely defined collection of blockchains. Granted, some of these blockchains have become empires in their own right (Ethereum, Solana, Avalanche, etc.), with billions in value, entire ecosystems of blockchain platforms on various levels, and countless tokens that hold value and power the platforms to which they are tied. Liquidity is provided in each of these ecosystems, and these liquidity pools facilitate trades by offering the capital needed for trades to happen quickly and efficiently.
These liquidity pools work fine if they connect to both sides of a trade, and if the pool has enough volume to handle the trades. Both of these become a problem when cross-chain trading is desired. Liquidity is typically locked within these separate networks, causing them to become narrow silos that don’t offer benefit outside their borders. Granted, trading platforms can reach out to other chains via different evolutions in Web3, most notably the bridge or a wrapper. Each of these can technically get the job done, but they create latency, cost, additional infrastructure development, and as a result can present as the weakest link in a system constantly under attack by opportunistic bad actors.
Even if we can reach out to other chains efficiently, those liquidity silos create an imbalance and inefficiency. When this liquidity is fragmented it can’t be used as a whole to facilitate trades. This can cause identical assets on different chains to trade at different prices, and that can be very dangerous. This becomes a target for taking advantage of these differences, which is great if a trader can take advantage, but at the cost of overall market cohesion. The liquidity as separated also results in an inevitable problem across chains, because separated out to different silos, it can’t support the cumulative market needs. Instead, some silos are taxed to exhaustion and others are underused. Both create problems and harm the market for everyone involved.
Popping The Bubbles
This problem is not new, and many teams have been working on solutions for years. There have been different approaches to solving this, with elements like cross-chain messaging, liquidity routing layers, and others. Each proposed solution aims to pop these bubbles and create what is referred to as “omnichain” liquidity, where the liquidity is used anywhere, as needed. Obviously, this would result in better trading, more efficiency, and a better market for everyone. As mentioned above, there is both progress and hope in this area, with cross-chain launchpad Calyx recently holding a token sale for one of its projects. The sale of Intellex was successful through Calyx’ use of the NEAR infrastructure, which is an abstraction that can cover chains in simplified, gasless efforts and claims to do so using “intents”, whereby users can express what they want to do (swap, stake, bridge, etc.) in a straightforward manner, with the infrastructure itself using smart contract elements to process the transaction. This is an oversimplification of what is behind the scenes, but the proof through the recent token sale which involved a whopping 11 chains shows what is possible.
That is a wrap! 🪷
— Calyx (@Calyxdotxyz) October 15, 2025
Thank you for participating in @intellex_xyz sale! 💫 pic.twitter.com/XjjPxjlvvo
Final Thoughts
If NEAR and other infrastructure developments are successful, and launchpads like Calyx can make good use of them, then the vast inefficiencies and security risks we’ve dealt with up to this point may be a page in the history books, not a key concern for stakeholders. Time will tell, but it’s worth paying attention to the innovations designed to pop liquidity bubbles and break down the silos within. The benefits that will come from these advances won’t just help the platforms they touch. They will quickly benefit the entire market as liquidity is liberated and is able to serve everyone, no matter which chain they are currently trading on. Let’s hope that by this time next year, we have no more bubbles, no more silos, and that the liquidity pools have become an interconnected ocean, allowing free and hyper efficient trade all the way around the globe.
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