Polygon Expands DeFi: Institutional Liquidity Goes Onchain

Polygon Labs has partnered with Manifold Trading, a quantitative investment firm, to bring institutional-grade liquidity, professional execution & tighter spreads across the Polygon DeFi ecosystem. This collaboration bridges the gap between traditional market structure and decentralized finance, creating an onchain environment ready for institutional capital flow, real-world asset (RWA) settlement, and global payment infrastructure.

• Institutional Liquidity Meets Onchain Market Structure
• From Fragmentation to Flow: Making DeFi Work for Institutions

Institutional Liquidity Meets Onchain Market Structure

In traditional markets, professional liquidity providers ensure smooth execution, tight spreads, and stable pricing by continuously quoting both sides of a trade and rebalancing across venues. However, decentralized finance (DeFi) has long suffered from fragmented liquidity pools and inconsistent market depth, resulting in poor execution and high slippage.

With this collaboration, Manifold Trading will deploy quantitative market-making and arbitrage strategies across major Polygon-based decentralized exchanges. The goal: to close liquidity gaps, stabilize pricing, and ensure consistent depth across DeFi markets. For new protocols launching on Polygon, Manifold’s early participation will provide deep, data-backed liquidity from day one, fostering confidence among institutional and retail participants alike.

Institutional liquidity meets onchain markets.

We’re teaming up with @ManifoldTrading to bring institutional-grade standards across Polygon’s DeFi ecosystem.

[ ] defragmenting liquidity
[ ] tighter spreads
[ ] institutional-grade market-making + execution
[ ] support +… pic.twitter.com/H6C749aA5a

— Polygon (@0xPolygon) October 28, 2025

Making DeFi Work for Institutions

Liquidity fragmentation has been one of the biggest barriers preventing DeFi from attracting institutional investors. Institutions require predictability, fair execution, and market depth, standards that traditional financial systems have perfected over decades.

Polygon and Manifold’s collaboration addresses this challenge head on. By integrating institutional grade liquidity management directly into DeFi’s open architecture, they are creating a market that mirrors traditional finance in structure but operates with onchain transparency and accessibility.

This shift enables fintechs, neobanks, and asset managers to enter the ecosystem with greater confidence. Whether for onchain payments, RWA tokenization, or DeFi yield strategies, they now have access to a liquidity environment that supports low volatility, tighter spreads, and faster settlement, key ingredients for institutional grade participation.

Polygon has continuously upgraded its core infrastructure to support professional grade financial activity onchain. As market making and settlement standards continue to mature, Polygon positions itself as the preferred stack for institutional finance, offering both speed and security.

The collaboration between Polygon and Manifold marks a pivotal moment for decentralized finance. By aligning data driven liquidity management with Polygon’s high speed, interoperable infrastructure, DeFi takes a decisive step toward institutional readiness.

As market execution quality approaches Wall Street standards, yet remains transparent, permissionless, and onchain, Polygon cements its role as the foundation for institutional grade DeFi, payments, and real world asset settlement.

If you find any issues in this blog or notice any missing information, please feel free to reach out at yash@etherworld.co for clarifications or updates.

Related Articles

1. Polygon PoS Hard Fork
2. Polygon's L2 Solution
3. How to Use Polygon testnet?
4. Polygon announces to launch zKEVM mainnet beta
5. How Polygon is helping Blockchain Movement in India?