> For the complete documentation index, see [llms.txt](https://docs.wavex.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.wavex.fi/docs/problem-and-solution.md). # Problem & Solution ## Limitations of Traditional Trading #### **Lack of Transparency** * In many centralized exchanges, transaction records and liquidation processes are often opaque, making it difficult for traders to verify the fairness of the system. #### **High Barriers to Entry** * Orderbook-based futures trading typically requires a deeper understanding of advanced trading strategies and often favors institutional traders or large funds with significant capital. #### **Difficulty in Risk Diversification** * When liquidity is spread thinly across multiple assets or orderbooks, market stability can suffer, leading to higher price slippage and volatility. ## How waveX Addresses These Challenges #### **Transparent On-Chain Trading** * Every step of opening or closing a position is executed via smart contracts, creating a fully **verifiable record** on the blockchain. This transparency reduces the risk of hidden fees or unfair liquidations. #### **WLP (Liquidity Pool) Structure** * Instead of matching orders through an orderbook, waveX relies on a shared liquidity pool where deposited assets facilitate both long and short positions. * **Lower Entry Barrier**: You only need a small amount of assets to become a liquidity provider. * **Consolidated Liquidity**: By pooling assets in one place, waveX can offer more stable trading conditions and reduced price slippage. #### **Regular Rewards Distribution** * Liquidity providers (LPs) earn some of various fees (e.g., open and close positions, swaps) as rewards, distributed weekly (typically on Wednesdays, subject to change). * Here is the details for the reward: