Single-Sided Liquidity Explained: Provide LP With One Token
Single-sided liquidity lets you LP with one token instead of a pair. How it works across concentrated-liquidity AMMs, lending and liquid staking, and what risk replaces impermanent loss.
Providing liquidity has traditionally meant bringing two assets in equal value. If you wanted trading fees, you needed both sides of the pair. That requirement is a real barrier: it forces you to hold assets you may not want, exposes you to impermanent loss on both legs, and complicates the simple act of putting capital to work. Single-sided liquidity removes it. You deposit one token, and the protocol handles the rest.
This guide covers what single-sided liquidity actually is, the three mechanisms protocols use to deliver it, where you can use it today, what risk replaces impermanent loss, and how JewelSwap applies it to NFTs on MultiversX.
What single-sided liquidity means
In a classic automated market maker, a pool holds two tokens and their relative balance sets the price. To become a liquidity provider you deposit both in the required ratio, and you earn a share of trading fees. This is the model early AMMs popularised, and it still dominates DeFi.
Single-sided liquidity, also called one-sided liquidity, lets you deposit a single asset. You bring one token; the protocol supplies or simulates the other side. The LP decision collapses to one question: how much of one asset to commit.
The three mechanisms behind it
"Single-sided" describes a user experience, not one technique. Underneath, protocols achieve it in three distinct ways, and the differences determine your risk.
1. Range-edge deposits in concentrated liquidity
In a concentrated-liquidity AMM you choose a price range rather than providing across the whole curve. Set a range entirely above the current price and the position consists only of the asset being sold; set it entirely below and it holds only the base currency. You have deposited one token — but the moment price moves into your range, the position converts. This is single-sided at entry and two-sided in outcome. It is the most common form and the most misunderstood.
2. Protocol-paired liquidity
Some designs accept your single token and pair it with liquidity the protocol itself supplies. You keep exposure to your deposit; the protocol absorbs the other leg and takes a share of fees for doing so. Impermanent loss is genuinely reduced here, because you never held the second asset.
3. Naturally one-sided venues
Lending markets are the original single-sided venue: supply one asset, earn a rate, no pair involved. Liquid staking is the same shape — deposit SUI, EGLD or XRD and receive a liquid token that accrues value. There is no second asset and therefore no divergence to lose to. Most people using "single-sided" products in practice are using these.
Where you can actually provide single-sided liquidity
| Venue type | What you deposit | Impermanent loss? | Main risk |
|---|---|---|---|
| Concentrated-liquidity range edge | One token at a range boundary | Yes, once price enters the range | Position converts to the other asset |
| Lending market | One asset | None | Borrower default, bad debt, utilisation spikes |
| Liquid staking | One native token | None | Slashing, LST depeg, unbonding delay |
| Protocol-paired pool | One token | Reduced | The protocol is your counterparty |
| NFT single-sided pool | Base currency or NFTs | Not in the classic form | Directional: laddering into a falling floor |
What replaces impermanent loss
Impermanent loss needs two moving assets to bite. Remove one and the classic divergence largely disappears — but the risk does not vanish, it changes shape.
With a single asset quoting one direction, your exposure becomes directional. Fund buy orders with a base currency and the asset keeps falling, and you accumulate a position worth less than the currency you spent. List assets to sell and the market runs after your lowest asks fill, and you sold into strength below where you could have.
These are real risks, but they are more intuitive than two-sided divergence and more controllable — you choose the ladder, the range and the size. The honest framing: single-sided liquidity trades one exposure for another that most providers find easier to reason about. For the mechanics of the loss it avoids, see our breakdown of impermanent loss and how to calculate it.
How JewelSwap uses single-sided liquidity for NFTs
JewelSwap brings the AMM model somewhere it rarely reaches: NFTs. Its NFT AMM/DCA modules on MultiversX let users trade NFTs against liquidity pools much as you would swap tokens on a DEX, with the priced asset being an NFT collection rather than a fungible token.
JewelSwap supports both two-sided and single-sided pools. Two-sided pools facilitate classic NFT-to-EGLD market making. Single-sided pools serve dollar-cost-averaging strategies without the two-asset impermanent-loss exposure.
Buy pools and sell pools
- Buy pools: you provide EGLD to place multiple purchase bids. It is a buy pool because you, the creator, want to buy NFTs. Prices step down as the ladder fills.
- Sell pools: you provide the NFTs you wish to sell. Prices step up, adjusting only after each NFT sells.
Pricing is set automatically using delta parameters, either exponential (percentage-based) or linear (fixed amount). The documentation gives a worked buy-pool example with an exponential delta: five bids at 5, 4.5, 4.05, 3.645 and 3.2805 EGLD. Each step is 10% below the last, so your capital buys progressively cheaper as the market moves toward you.
Why this is dollar-cost averaging
The laddered structure is what makes these pools a DCA tool. Instead of buying or selling a whole position at one price, the pool spreads execution across levels, reducing the impact of volatility. A buy pool accumulates quietly as prices fall through your ladder; a sell pool distributes as prices rise through your asks. Same logic as dollar-cost averaging into tokens, applied to NFTs and automated onchain.
Fees
JewelSwap's 1% platform fee is deducted from pool creator profits rather than from trading volume. In two-sided pools participants also earn EGLD trading fees as market makers, and the creator sets their own fee per transaction. Primary source: the single-sided liquidity pools documentation.
The risks, stated plainly
Single-sided pools reduce the classic two-asset dynamic; they do not remove market risk. JewelSwap's documentation is direct: impermanent loss stems from price movement after deposit and matters most in two-sided pools, where rebalancing can leave you EGLD-rich or NFT-rich. LPs can still profit despite it, provided fees earned exceed value lost.
For single-sided pools the exposure is directional. A buy pool filling as a collection craters leaves you holding NFTs bought above the new floor. A sell pool emptying into a rally means you sold below the top. NFT markets are thinner and more sentiment-driven than token markets, so floors move fast. Commit only what you can hold through a full cycle, and choose your delta and range deliberately.
Frequently asked questions
What is single-sided liquidity in simple terms?
Providing liquidity with one asset instead of a matched pair. You commit one token, the protocol handles market-making on the other side, and you skip sourcing and balancing a second asset.
Does single-sided liquidity eliminate impermanent loss?
It depends on the mechanism. In lending and liquid staking there is no second asset, so there is no impermanent loss at all. In a concentrated-liquidity range-edge position there very much is — your single token converts to the other asset as price crosses your range. Protocol-paired pools sit in between.
How is a single-sided pool different from a two-sided pool?
A two-sided pool needs both assets and rebalances between them as trades flow, creating impermanent loss but earning continuous two-way fees. A single-sided pool needs one asset and quotes one direction at a time, concentrating exposure in the asset you chose.
What is a buy pool versus a sell pool on JewelSwap?
A buy pool is funded with EGLD and places bids at descending prices because the creator wants to buy NFTs. A sell pool is funded with NFTs and lists them at ascending prices, stepping up only after each sale.
Is JewelSwap available on chains other than MultiversX?
JewelSwap operates on MultiversX, Sui and Radix. The NFT AMM/DCA modules described here run on MultiversX; liquid staking and yield farming span all three.
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