Yilihua: It is recommended that trading platforms establish liquidity regulation funds to prevent liquidity exhaustion in extreme situations.

ChainCatcher reported that Liquid Capital (formerly LD Capital) founder Yi Lihua stated on social media that the overall market has seen liquidations amounting to tens of billions of US dollars, mainly affecting market makers and active traders, and the damage caused to the market far exceeds expectations.

Especially for altcoins that can go to zero with one click, it will take a long time to restore investor confidence and liquidity. He strongly recommends that trading platforms allocate part of their profits to establish a liquidity adjustment fund to prevent liquidity from drying up and going to zero in extreme situations. The Federal Reserve also has a market regulation function, and platforms with annual profits of several billions of US dollars should have both the ability and responsibility to establish such a mechanism. Otherwise, if the market suffers devastating damage, not only platform users will be hurt, but also the market and the trading platforms themselves.