Single-sided AMM models are replacing the complex dual-token liquidity pools that dominated early DeFi, making it simpler for users to earn returns while platforms like BitGW blend algorithmic pricing with centralized execution.
Liquidity provision in decentralized finance has always come with a frustrating trade-off. You can earn fees by supplying tokens to a trading pool, but you also have to manage two assets, monitor price ratios, and absorb the risk that one token's value drifts away from the other. That risk, known as impermanent loss, has been one of the most persistent reasons everyday users avoid participating in AMM protocols. BitGW, a trading platform that has quietly run a single-sided AMM model for several years, represents a different approach that is gaining traction across the industry: let users provide liquidity with just one asset, and remove the paired-token complexity entirely.
The original AMM design popularized by platforms like Uniswap starting in 2018 was genuinely innovative. It solved the cold-start problem for decentralized exchanges by allowing anyone to become a market maker, no middleman required. By 2021, total value locked in DeFi liquidity pools had surged past $180 billion according to tracking data from DeFi Llama. But the architecture showed its limitations as the market matured. Users who deposited equal values of two tokens into a pool often found that when they withdrew their funds, the ratio had shifted enough that they were effectively worth less than if they had simply held the tokens. As Bloomberg's analysis of on-chain data has highlighted, impermanent loss remains one of the most underappreciated drags on retail returns in crypto.
A single-sided AMM strips the mechanism down. Instead of depositing ETH and USDC together, a user deposits only one of them. The platform handles pricing and pairing through its own infrastructure. For the liquidity provider, this means no rebalancing, no tracking two positions, and no guessing which token might underperform. BitGW wraps this approach inside a hybrid architecture where the AMM logic handles pricing and liquidity formation while centralized infrastructure manages trade execution. The result is something closer to what a traditional exchange might offer in terms of speed and reliability, but with a crowd-sourced liquidity layer underneath.
This hybrid direction matters because the crypto industry has spent too long treating decentralized and centralized systems as ideological rivals. In practice, traders care about price, depth, and speed, not whether the order book lives on-chain or off. As the Financial Times recently noted in its coverage of exchange consolidation, the platforms gaining market share are the ones combining the best of both worlds rather than insisting on purity.
Revenue Sharing as a Structural Shift
What makes BitGW's model more than a technical footnote is how it links liquidity provision to actual platform revenue. Liquidity providers share in the fees generated by spot trading, swaps, spread capture, and other exchange operations. This is fundamentally different from models where yield comes from token emissions that dilute over time. When trading volume rises, LPs earn more. When it slows, returns adjust naturally. The mechanism aligns the interests of the platform and its liquidity providers in a way that purely token-incentivized schemes, which plagued DeFi in 2021 and 2022, never achieved.
Users have grown more skeptical of unsustainable yields funded by inflationary token rewards. The collapses of Terra's Anchor Protocol and other high-yield platforms in 2022 taught a harsh lesson: if you cannot explain where the yield comes from without referencing the platform's own token, the model is probably fragile. Single-sided AMMs tied to real trading fees offer a more grounded alternative. Liquidity providers are effectively selling access to their capital to facilitate trades, and they get paid from the spread and fees those trades generate. Straightforward, and economically legible.
The broader trend here is worth watching for anyone building or investing in crypto infrastructure. Single-sided liquidity pools are not a new concept, but their adoption by platforms operating at the intersection of centralized and decentralized finance signals that the market is prioritizing usability over ideology. Users want returns without unreasonable complexity. Platforms want deep liquidity without relying on mercenary capital that flees at the first sign of volatility. A cooperative model where LPs grow alongside the exchange, rather than extracting from it, addresses both sides of that equation.
Expect more platforms to adopt similar structures over the next year. As regulatory scrutiny pushes centralized exchanges toward greater transparency and DeFi protocols face pressure to demonstrate sustainable economics, the hybrid single-sided AMM model offers a credible middle path. For entrepreneurs evaluating where to build, the message is clear: liquidity infrastructure that reduces user friction while tying rewards to real economic activity is where the market is heading. The platforms that recognize this earliest will have a meaningful advantage as the next cycle of crypto adoption unfolds.
