Manifold Brings Institutional Liquidity Standards to DeFi on Polygon

tl;dr

• Polygon Labs has teamed up with Manifold Trading, a quantitative investment firm, to strengthen DeFi liquidity and onchain markets in the Polygon ecosystem. 
• The collaboration introduces institutional-grade market-making, tighter spreads, and continuous liquidity across Polygon’s DeFi ecosystem.
• It marks a major step in Polygon’s evolution into the most reliable network for institutional DeFi, payments, and real-world asset (RWA) settlement.
• By pairing Polygon’s high-speed infrastructure with Manifold’s data-backed liquidity, DeFi moves closer to traditional market performance standards.

Polygon Labs has teamed up with Manifold Trading, a quantitative investment firm, to bring institutional execution standards to decentralized finance.

The collaboration will introduce data-driven liquidity management, tighter spreads, and consistent pricing across Polygon’s DeFi ecosystem, a crucial step toward making onchain markets ready for institutional-scale capital flows.

For institutions exploring DeFi, the promise of yield often collides with one major barrier: fragmented liquidity.

Polygon and Manifold aim to solve that by applying the same liquidity discipline and depth that underpins mature financial systems to onchain markets.

Institutional liquidity meets onchain market structure

In traditional markets, professional liquidity firms keep execution smooth and spreads tight. They quote both sides of a trade, rebalance across venues, and create stability, even when volumes surge.

That structure has been largely missing in DeFi. Liquidity pools often sit idle or get fragmented between DEXs. The result is inconsistent pricing and high slippage for large orders.

Manifold will deploy quantitative market-making and arbitrage strategies across Polygon’s major decentralized exchanges to close those gaps. The firm will also work with emerging DeFi protocols to ensure new markets launch with meaningful depth from day one, a prerequisite for institutional trading activity.

The impact can be measured. Compressing the spread on a $1 million trade from 50 basis points to 5 basis points saves roughly $4,500 in execution costs. Scaled across billions in volume, those savings make DeFi investable at institutional scale.

From fragmentation to flow: Making DeFi work for institutions

Liquidity fragmentation has long limited DeFi’s growth beyond retail. Institutional participants need the same guarantees they have in traditional markets — predictability, depth, and fair execution.

This collaboration gives them a reason to look again. By integrating professional liquidity management directly into DeFi infrastructure, Polygon and Manifold are building an execution environment that looks and feels like established financial systems — but runs on open rails.

For fintechs and neobanks exploring onchain payments or RWA trading, the benefits are immediate: tighter spreads, lower volatility, and faster settlement across the Polygon network.

Polygon’s infrastructure advantage: Built for speed and trust

Polygon’s ongoing infrastructure upgrades have positioned it as the natural home for institutional DeFi.

• Rio hardfork introduced hardened reliability with the elimination or reorg risk, near-instant finality, and the ability to hit 5,000+ TPS throughput
• Heimdall v2 brought sub–5-second finality for real-time settlement
• Agglayer is unifying cross-chain liquidity under one interoperable framework

DeFi is moving from speculative experimentation to institutional readiness. As market-making goes onchain and execution quality rises to professional standards, Polygon cements itself as the trusted stack for global payments and institutional-grade DeFi. 

About Polygon Labs

Polygon Labs is a Web3 software company developing Polygon Proof-of-Stake network, the premiere blockchain for payments and RWAs, and Agglayer, a unified web of chains that feels like the Internet. Polygon is known as the low-cost, high velocity network, with billions secured in stablecoins, supporting a robust payments ecosystem to help grow Agglayer use cases in an interoperable Web3. Research from Polygon Labs has contributed to the development of widely-adopted zero-knowledge technology, with successful, independent projects incubated through the Agglayer Breakout Program, such as Katana, ZisK, Miden, PrivadoID, and more.

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