On October 28, 2025, Polygon Labs announced a partnership with Manifold Trading to introduce institutional-level enforcement standards and increase Polygon liquidity across the DeFi ecosystem.
How will Polygon liquidity reshape DeFi?
What features are being introduced?
Manifold Trading deploys quantitative market making and on-chain arbitrage strategies across major Polygon DEXs to reduce spreads and reduce cross-venue disruption. The initiative emphasizes AMM-adapted institutional market-making techniques, continued two-sided liquidity, and who's involved.
Partners named in the announcement are Polygon Labs and quantitative family office Manifold Trading. Polygon cited engineering upgrades such as AggLayer and GigaGas updates as complementary infrastructure to support faster finality and cross-chain liquidity.
How does Polygon's liquidity impact Polygon Dex's liquidity and price efficiency?
According to a PR Newswire release, the partnership aims to reduce spreads and improve pricing efficiency for large trades. The announcement uses the example of a $1 million trade where compressing the spread from 50 basis points to 5 basis points reduces the execution cost from approximately $5,000 to $500, implying a savings of approximately $4,500 on that trade (PR Newswire).
Simply put, these measures aim to reduce slippage and make the DeFi market on Polygon more investable for institutional investors.
Operational changes and execution standards DeFi
On-chain quantitative market making focuses on execution criteria that mimics professional trading desks, adapting models for gas costs, AMM curves, and smart contract settlement. This reduces execution risk and improves consistency for large orders.
What should institutions expect?
Note: Financial institutions should expect to reduce execution costs and increase depth over time, rather than eliminating all liquidity risk immediately. This partnership is positioned as a structural improvement to support large-scale institutional implementation, rather than a single turnkey product.
Polygon Labs' Maria Adamjee said the partnership will bring “transparency and performance that matches or exceeds traditional markets,” while Manifold's Noah Hanover said the effort focuses on “market stability and depth of scale.” For additional technical context, see Polygon's website.
