# Classic Liquidity

Classic liquidity refers to the original model of Automated Market Makers (AMMs), where liquidity is provided across the entire price range for a given token pair. This was first popularized by Uniswap v2, and remains the simplest and most passive form of liquidity provisioning.

In this model:

* Liquidity Providers (LPs) deposit equal values of two assets into a pool (e.g., ETH/USDC).
* Swaps occur at a constant product formula: `x * y = k.`

**Pros:**

* Easy to use – No price range selection or rebalancing needed.
* Always available – Liquidity exists across all price ranges.
* Passive exposure – Good for LPs who prefer simple, set-and-forget strategies.<br>

**Cons:**

* Capital inefficient – Most liquidity sits unused if prices remain in a narrow range.
* Impermanent loss – LPs are exposed to loss versus simply holding the tokens.
* Less competitive yields – Compared to concentrated or actively managed liquidity.

#### Why It Still Matters

While concentrated liquidity offer more capital efficiency, classic liquidity remains a great starting point for LPs new to DeFi, or for protocols aiming to seed initial pools with wide coverage and accessibility.<br>

At Lynex, we support both classic and advanced liquidity models — giving users and protocols the flexibility to choose the approach that best suits their goals.