Cross-chain liquidity used to be a messy patchwork of wrappers, custodial bridges, and opaque relayers. Anyswap, later known as Multichain, tried to streamline that chaos with a protocol that allowed users to move assets across dozens of chains and swap with a familiar automated market maker experience. Whether you still hold Anyswap token exposure, provide capital in pools that originated on the Anyswap exchange, or simply study cross-chain market structure, the mechanics of liquidity on this stack remain instructive. The architecture shaped how incentives worked, where yield came from, and which risks hit hardest when things went wrong.
This piece unpacks how liquidity provision worked on the Anyswap protocol, the engines that drove returns, and the places where risk quietly accumulated. I will draw on hands-on observations from live deployments, and I will point out what to watch for if you provide liquidity to any similar Anyswap cross-chain design today.
The building blocks of Anyswap liquidity
At a high level, Anyswap DeFi liquidity lived at the intersection of three subsystems: automated market maker pools for same-chain swaps, wrapped cross-chain assets minted via bridge contracts, and routing logic that stitched them together. If you wanted to move USDC from Ethereum to Fantom and then swap to native FTM, the protocol would lock your USDC on chain A, mint an asset or trigger a liquidity routing on chain B, then rely on a pool to price the final asset conversion. Each step touched a different risk surface, which is why liquidity providers often demanded yields above what a single-chain AMM would offer.
On the same chain, Anyswap exchange pools handled swaps with curves similar to traditional AMMs. Many pools were two-asset, either stable-stable with a low slippage curve, or volatile pairs using a constant product model. Liquidity providers deposited both assets in proportion to pool weights, then earned a share of trading fees. Cross-chain routing encouraged volume, and volume, in turn, drove fee revenue. This feedback loop is why Anyswap swap activity concentrated in asset types that bridged often: stablecoins, wrapped BTC, and gas tokens for EVM chains.
The bridge side relied on smart contracts and off-chain validators or signers that observed events on the source chain and authorized minting or releasing assets on the destination. That subsystem made the Anyswap multichain experience possible, but it also introduced a second layer of liquidity: the inventories held to facilitate instant settlement without waiting for signatures or finality. Where that inventory sat, and how it was controlled, affected both user experience and LP risk.
Where the yield came from
Returns to LPs on Anyswap were not mysterious; they came from a mix of trading fees, protocol incentives, and sometimes bridge spread. Fee rates varied by pool and chain, typically in the range of 0.04 to 0.3 percent. Stable swap pools often took a lower fee due to higher volume and tighter pricing. Volatile pairs justified higher fees to compensate for impermanent loss.
Beyond fees, the protocol used token incentives to bootstrap depth. Early on, ANYS served this role; later, MULTI replaced it as the Anyswap token rebranded. Incentive schedules were not uniform. They changed by epoch, chain, and pool, and were frequently adjusted to rebalance the distribution of liquidity across routes that had become congested. If you provided liquidity, your yield was the sum of fee APR and token APR, minus slippage costs from arbitrage and whatever impermanent loss you incurred.
In some configurations, particularly for wrapped assets, LPs also earned a small spread embedded in the cross-chain transfer. This worked like a toll to cover bridge operational risk and to subsidize liquidity inventory. The spread was often hidden from casual users who focused on the all-in quote rather than its component fees, but it mattered for LP profitability. When volumes spiked, that spread could deliver more than the base AMM fee.
One practical note from real deployments: the most consistent fee income accrued to pools that sat on routes with sustained, repeatable flows. Think exchanges of USDC between Ethereum and BSC, or conversions from stablecoins to native gas tokens on high-throughput chains. Pools aimed at exotic, thinly traded pairs looked attractive on emissions charts, yet the fee side lagged and the incentive tokens dumped faster than they vested. The headline APR turned out to be more marketing than realized return once you included slippage and opportunity cost.
How routing shaped liquidity demand
Routing logic defines where your capital actually gets used. Anyswap’s routers attempted to pick the cheapest combination of paths across pools and bridge legs. They balanced fee rates, price impact, gas costs, and sometimes incentive kickbacks. On busy days, you could see volume move away from a pool with shallow depth to a cheaper neighbor, which cratered fees for the abandoned pool until incentives were rebalanced.
This meant LPs were playing a moving target game. It was not enough to deposit into a single pool and forget it. The active LPs who maximized returns watched route flows, reallocated capital across chains, and consolidated into pools that consistently sat on the main arteries of the Anyswap bridge. They favored pools that priced close to parity with external venues, so that arbitrage would be mild rather than constantly draining value.
Another routing nuance mattered for risk. Some routes used mint-and-burn mechanics for wrapped assets, others relied on liquidity relays that paid out immediately before final settlement was confirmed. Immediate payouts improved user experience, but concentrated inventory risk in the relay side. When routes tilted toward relay-style settlement, LPs indirectly underwrote timing and validator risks even if they only saw a typical AMM interface.
Providing liquidity in practice
The operational side of providing to Anyswap pools was straightforward on the surface. You connected a wallet, chose a chain, selected a pool, and deposited balanced assets. Incentives, if available, were claimed per epoch and often needed manual harvest. In practice, a few details separated a clean experience from frustrating one:
- Balance your deposits after checking pool composition and price. Pools often deviated slightly from a 50-50 split. If you deposit without rebalancing, the contract will rebalance by effectively selling one asset for the other, and you will pay the pool’s price impact to yourself. Check the incentive schedule’s vesting and emission curve. Some epochs delayed full unlocks, and token price impact from emissions could undercut APR. If emissions halved next week, your forward yield might be half the dashboard headline. Factor gas and bridge fees. On smaller chains, gas was negligible, but on Ethereum, entering or exiting a pool during congestion could wipe out a week’s fees. If your strategy required rebalancing across chains, treat gas as a line item in your expected return model. Monitor oracle and peg health. Stablecoin pools that included wrapped or bridged versions sometimes drifted from their pegs when bridge capacity was constrained. If you provided to a pool with a synthetic stable, watch that peg closely. Keep an eye on governance and security notices. The Anyswap protocol communicated route suspensions or contract upgrades through dashboards and social channels. Liquidity stuck in a paused route can be a bigger headache than a bad week of fees.
Those five checks capture the reality I saw in the field: most LPs lost money not because fees were insufficient, but because hidden costs and shifting incentives overwhelmed static assumptions.
Understanding impermanent loss in a cross-chain context
Impermanent loss is old news for anyone who has provided to an AMM, but cross-chain AMMs introduce wrinkles that matter. When you pair a wrapped asset with a native token, your exposure includes the wrapper’s peg and the underlying’s market price. If the wrapped asset diverges from its reference value due to bridge congestion or trust issues, your pool can end up overweight the asset that the market is discounting. That converts impermanent loss into realized loss when you withdraw.
Stable swap pools reduce this risk, but they do not eliminate it. A 10 to 50 basis point deviation for a few hours is manageable. A multi-percent depeg for days, accompanied by thin exit liquidity on the destination chain, can destroy a month of fees. The mitigation is not elegant, but it is effective: avoid pools that combine untested wrappers with volatile chain conditions, and prefer routes that have alternative redemption paths if the primary bridge pauses.
Volatile pairs carried the standard constant product risks. Anyswap’s cross-chain flows did not change the math, but they often increased the frequency of arbitrage. Arbitrageurs kept prices aligned across chains, which helped traders but extracted value from LPs whenever prices moved. If your thesis for a volatile pair relies on high emissions to outrun impermanent loss, your exit timing matters as much as your entry.
Incentives, emissions, and mercenary capital
Protocols use tokens to attract liquidity because it works. The catch is that mercenary capital leaves the moment emissions fade or a better farm appears two clicks away. Anyswap token programs were no exception. Pools ballooned during incentive campaigns, then shrank sharply afterward, which in turn affected routing and fees. LPs who planned for long-term returns often got whipsawed by these cycles.
A useful mental model: treat emissions as a bootstrap subsidy, not a base yield. Build your thesis on fee income first. If a pool only pencils out when token incentives are above a certain threshold, you are riding a moving escalator. You want pools that maintain reasonable fee APR without emissions, and you want to layer incentives as a bonus rather than as the core of your return.
On several chains, I tracked episodes where incentive APYs looked spectacular on day one, then normalized within a week as TVL flooded in. The early depositors captured the peak. Late entrants ended up with crowded pools and thin fees. If you play the emissions game, insist on fast feedback loops: small initial deposits, quick claims, and a willingness to exit without attachment.
Security, trust, and the bridge layer
The strongest returns in crypto can be erased by one bad security event. Anyswap’s later history underscored how the bridge layer carries concentrated risk. Bridge contracts are complicated, and any design that relies on off-chain validators or signers inherits social and operational risk, not just code risk. Liquidity providers seldom saw that risk directly, but they bore it when routes paused or wrapped assets depegged.
Risk assessment here is a craft, not a checklist. Still, a few practical markers helped me avoid trouble:
- Verify whether the route you rely on is a mint-and-burn bridge, a liquidity relay, or a hybrid. Mint-and-burn reduces inventory risk but can be slower; relays speed up settlement but require larger trusted inventories. Inspect transparency around validator sets or signers. Public, rotating multisigs with on-chain key changes are better than opaque arrangements. Look for clear disclosures on how thresholds are managed, and whether keys are geographically and institutionally distributed. Track response patterns to prior incidents. Incidents happen. The measure of operational maturity is how quickly routes are paused, funds are protected, and root causes are disclosed. Silence is a red flag. Favor assets with multiple redemption paths. If a wrapped token can be redeemed through more than one bridge or via native conversions on a destination chain, the risk of being trapped in a depeg is lower. Understand insurance and backstops. Some pools or protocols set aside insurance funds. They rarely cover tail events fully, but partial coverage can cushion the blow.
Anyone providing liquidity to an Anyswap bridge-adjacent pool, or to a successor Multichain deployment, should price these considerations into expected returns. A few points of extra APR do not compensate for a tail loss that returns your capital at sixty cents on the dollar.
Cross-chain market structure and slippage realities
A quiet truth about cross-chain swaps: the cheapest route on a single chain is not always the cheapest once gas, bridge fees, and waiting time are included. Anyswap’s routing logic attempted to optimize for total execution cost, but LPs still felt the pressure of fragmented liquidity. When large traders executed cross-chain, they would often source liquidity from multiple pools at once, a process that increased the number of small arbitrage cycles. That increased fee events for LPs, which was good, but it also increased the cumulative price impact paid by pools, which can stealthily reduce net returns over time.
Slippage tolerance settings by users also ripple through LP results. If the default tolerance is loose, more trades slip into worse pricing, producing larger arbitrage gaps that bots immediately close. As an LP, this is a double-edged effect: more arbitrage means more fee throughput, but also more inventory churn at unfavorable prices. Pools with robust depth relative to average trade anyswap.uk Anyswap protocol size manage this well. Thin pools do not, which is why looking at the entire depth curve, not just TVL, matters. A pool with 5 million in TVL but a long tail of inactive liquidity can behave worse than a 2 million pool with tight, active bands around the mid-price.
The role of alternative venues
No liquidity provider operates in a vacuum. Anyswap exchange pools competed against native DEXs on each chain, CEX withdrawal routes, and other bridges offering similar wrapped assets. Whenever an alternative venue offered tighter prices or faster settlement, flow shifted accordingly. The healthiest Anyswap pools sat where they plugged into irreplaceable routes: think unique chain pairs, or tokens that the protocol bridged early and built user habits around.
Price discovery also lived elsewhere. If a token’s primary market was on a central exchange, on-chain pools became passive followers, with arbitrage enforcing parity. In those cases, your fees depended on the speed and frequency of price updates. Rapidly trending markets generate more rebalancing, which can heighten impermanent loss. Range-bound markets generate churn without trend, which tends to benefit LPs. It is worth knowing where your pool’s assets primarily trade, and whether those venues align with your risk appetite.
What changed with the Multichain rebrand
The transition from Anyswap to Multichain aimed to widen support for new chains and standardize the bridging stack. For liquidity providers, the day-to-day looked similar: same kind of pools, similar routing, and the familiar mix of fee and token incentives. The important change was concentration. As the protocol grew, more assets and routes depended on a smaller core of bridge infrastructure. Concentration increases efficiency and throughput, but it also raises the stakes when failures occur.
For LPs, the rebrand did not change the fundamental calculus. You still needed to understand the bridge trust model, monitor route health, and avoid overexposure to any one wrapped asset. What it did change was correlation. When the core bridge paused, multiple pools across multiple chains felt it at once. The diversification many LPs thought they had across chains turned out to be less robust than expected, because it all tied back to the same bridge layer.
Practical frameworks for LPs evaluating Anyswap-style pools
If you are considering an Anyswap swap pool or a successor Multichain route today, a simple framework helps you move from headline APR to realistic expected value:
- Map the route. Identify which bridge mechanics and which validator or signer sets touch your assets. If documentation is thin, assign a higher risk premium or walk away. Separate fee APR from token APR. Estimate fee income from recent volume and your expected share of the pool. Treat emissions as variable and decaying. Quantify gas and bridge costs. Model in-and-out costs in worst, base, and best-case scenarios. Cross-chain rebalancing is only worth it if these costs are low relative to your holding period. Stress test peg and liquidity. Ask what happens if the wrapped asset trades at a 1 to 2 percent discount for a week, or if a route pauses for 48 hours. If the result is catastrophic for your position, size accordingly. Decide your management cadence. Passive LPs should prefer deep, stable pools on major routes. Active LPs can chase short-term incentives but need tools and time to adjust quickly.
This framework is less about precision and more about not being surprised. The best LPs in these markets were not the ones with the fanciest math; they were the ones who understood where the bodies were buried and kept their exposure in line with that reality.
Risk scenarios worth rehearsing
I keep a short list of scenarios I run mentally before I deploy capital to any Anyswap protocol pool or cross-chain strategy.
- Bridge pause on a weekend. User funds are safe, but routes stop. Can you afford to stay in the pool until Monday without panicking into a bad exit? If not, your position is too large. Sudden incentive cut. Emissions halve overnight. TVL flees. Does the pool still earn adequate fees at the new depth? If not, do you have a preplanned exit, or a hedged position elsewhere? Peg wobble. The wrapped stable trades at 0.997 on the destination chain for six hours. Fees spike as arbitrage intensifies. Are you okay with temporary inventory skew, or do you rebalance? Gas price spike on Ethereum. Exiting costs triple. If your strategy depends on agile movements, high gas can trap you. Plan a minimum holding period to amortize fixed costs. Counterparty incident on another chain. Even if your pool sits on Chain A, a problem on Chain B that shares the same bridge can affect perceptions and route status. Watch the whole network, not just your lane.
Practicing these scenarios avoids paralysis when something breaks. You do not need to predict the future; you need to avoid wasting precious minutes building a plan under stress.
What traders needed from LPs, and why that mattered
Traders using the Anyswap exchange wanted predictable execution and reasonable slippage across chains. That depended on LPs supplying two things: depth near the mid-price and a stable peg for wrapped assets. When LPs provided balanced depth, the router could split orders across pools and keep price impact muted. When LPs chased emissions into shallow or fragmented pools, trade quality deteriorated, which reduced flow, which lowered fee income, and round it went.
This two-sided market reality explains why some incentive programs paid to consolidate liquidity rather than to expand TVL indiscriminately. A pool with 10 million focused tightly around the likely price does more for trader experience than a pool with 20 million spread thinly. As an LP, it is worth aligning your strategy with the trader’s experience. If your liquidity improves execution, your fees grow with volume. If your liquidity is just another number on a dashboard, the flow will pass you by.
If you still hold Anyswap or Multichain exposure
Many users still hold assets that originated via the Anyswap bridge or live in pools descended from it. If you are in that camp, basic stewardship applies. Verify token contract addresses on each chain, especially for wrapped variants; opportunistic scammers often deploy lookalikes with minimal differences. Keep tabs on project communications regarding route status and deprecation plans. If a particular route is being phased out, migrate sooner rather than later. Slower movers often face worse exit pricing once everyone rushes for the door.
For LP positions, use portfolio tools that see across chains. Fragmented dashboards create blind spots that lead to overexposure. Where possible, keep a portion of your capital in native assets on a chain with high liquidity and affordable gas, so you have dry powder to respond without crossing bridges during turbulent periods.
The balanced view
The Anyswap protocol showed what was possible when you stitched together dozens of chains with an accessible interface and a broad set of supported assets. It also surfaced how hard it is to manage security, incentives, and liquidity coherence across that many moving parts. For LPs, the lesson is not that cross-chain liquidity is a trap, but that returns come packaged with risks that compound across layers: AMM math, wrapper pegs, bridge trust, and AnySwap governance responsiveness.
When the pieces line up, Anyswap swap routes deliver steady fees and healthy usage, especially in stable pools on busy corridors. When the pieces drift, your capital becomes the shock absorber. If you choose to provide liquidity on an Anyswap exchange descendant or any Anyswap cross-chain analogue, build a plan that respects that reality. Price the risks, keep your capital nimble, and anchor your expectations to fee income rather than to ephemeral emissions. The market will reward the discipline, if not every week, then over the arc of a few cycles.