Single-Sided Liquidity: What It Is, Why It Matters, and What Goes Wrong

When you hear single-sided liquidity, a way to add one cryptocurrency to a liquidity pool without pairing it with another asset. Also known as unilateral liquidity provision, it’s a feature designed to make DeFi easier—especially for new users who don’t want to manage two tokens at once. Unlike traditional liquidity pools that require you to deposit equal values of two coins (like ETH and USDC), single-sided liquidity lets you put in just one—say, just SOL or just BTC—and the protocol handles the rest. Sounds simple, right? But behind the convenience is a web of risks most people don’t see until it’s too late.

Projects use single-sided liquidity, a mechanism that reduces friction for users entering DeFi protocols to attract more capital fast. It’s popular with new tokens trying to bootstrap trading volume. But here’s the catch: the protocol often uses complex algorithms to create artificial pairs, which can lead to impermanent loss, the temporary drop in value you experience when the price of your deposited asset moves sharply compared to its paired asset. If the token you deposited crashes 50%, your share of the pool might be worth less than if you’d just held it in your wallet. And unlike traditional staking, you don’t always get clear warnings about this.

Many of the posts in this collection show what happens when single-sided liquidity goes wrong. Projects like HappyFans, TomoDEX, and xFutures promised easy access to liquidity but collapsed because they relied too heavily on this model without real demand. Their tokens had no real use case, no trading volume, and no backup plan when users pulled out. Even worse, some airdrops—like those for CKN or Zenith Coin—were used as bait to lure people into these risky pools. The result? Empty pools, frozen funds, and users left holding worthless tokens.

Single-sided liquidity isn’t evil. It’s a tool. Used right, it can help new tokens gain traction. Used wrong, it becomes a trap for the uninformed. The key is knowing who’s behind the protocol, how the token’s value is sustained, and whether the liquidity is real or just a temporary illusion. If a project pushes single-sided liquidity as the main feature—without explaining how it manages price stability or protects users—you should be asking hard questions.

What you’ll find below are real stories of what happens when single-sided liquidity meets bad design, weak teams, and zero transparency. These aren’t hypotheticals. These are cases where people lost money because they trusted the surface-level promise. The posts here show you how to spot the warning signs before you deposit your first coin.