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Jubin Jacob, CFA @IamJubinMJ on x XXX followers
Created: 2025-07-25 07:53:58 UTC
Great question, Dhruv!. You’re absolutely right — liquidity can’t be the cause in itself. It’s the outcome of multiple enablers.
In IEX’s case, here’s what initially pulled in liquidity:
- First-mover advantage (2008 launch)
- Superior tech infrastructure — near-zero downtime, fast execution
- User-friendly UI/UX — for both large buyers and smaller discoms
- Trust built through regulatory alignment + transparent pricing
- Network effect — as volumes built up, more participants joined for better discovery
So yes, the platform strength, consistent reliability, and reputation as the “default” choice created a self-reinforcing loop of trust → liquidity → deeper discovery → more trust.
That’s hard to replicate overnight.
Also, with market coupling coming in — all exchanges will now share the same price discovery engine, order book, and clearing mechanism.
So in theory, price discovery is no longer exchange-specific — it’s centralized.
But here’s the catch:
Even in a coupled market, participants still prefer reliability, execution speed, platform support, and UI/UX.
And that’s where IEX still has an edge.
So while market coupling levels the price playing field, it doesn’t eliminate platform differentiation — which still influences where participants choose to place their bids.
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