The Jackson Liquidity Framework - Announcement

Lewis Jackson Ventures Unveils the Jackson Liquidity Framework: A New Standard for AMM-Based Liquidity Provisioning in CBDC and Tokenised Settlement Systems

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London, UK — Today, Lewis Jackson Ventures (LJV) announced the publication of the Jackson Liquidity Framework (JLF), a breakthrough model designed to solve a missing component in modern financial system design: how to accurately size liquidity for Automated Market Maker (AMM)–based settlement.

As global markets transition toward CBDCs, tokenised assets, and instant cross-border settlement, the need for prefunded liquidity in AMM pools has rapidly grown. Yet no regulatory framework — including Basel III, BCBS 248, or the CPMI-IOSCO PFMI — defines how much liquidity must be held to guarantee safe, predictable settlement performance.

The Jackson Liquidity Framework fills this gap.

Solving a Critical Liquidity Problem in Next-Generation Finance

AMMs promise near-instant, automated FX conversion for CBDCs and tokenised deposits, but they introduce complex, nonlinear liquidity behaviour. Factors such as slippage, directional flow imbalance, intraday clustering, and fragmentation make liquidity requirements dramatically more volatile than traditional payment rails.

Until now, institutions lacked a formal, quantitative way to measure and mitigate these risks.

The Jackson Liquidity Framework provides the first unified methodology—combining stochastic modelling, Monte Carlo simulations, and regulatory liquidity logic—specifically for AMM-based corridors.

Key Components of the Framework

• JLR — Jackson Liquidity Requirement

A reserve-sizing rule combining slippage tolerance, directional-flow Value-at-Risk, intraday liquidity stress, and Basel III liquidity encumbrance considerations.

• JSI — Jackson Stability Invariant

A solvency-style condition defining the boundary between stable and unstable AMM reserve configurations — critical for risk officers and FMIs.

• JLS — Jackson Liquidity Surface

A 3D landscape illustrating how liquidity demand scales with arrival rates, payment-size volatility, and directional skew. Reveals the nonlinear (and often underestimated) liquidity cost of instant settlement.

• J-Score — Jackson Corridor Stress Metric

A single operational measure of corridor stress, designed for real-time monitoring and supervisory dashboards.

Together, these tools create a complete, institution-ready liquidity framework for tokenised settlement rails.

Insights From the Research

The whitepaper highlights several findings with major implications for CBDC design and AMM-based financial markets:

• Liquidity needs scale nonlinearly, rising sharply under higher arrival rates or volatility.
• Clustering effects modelled through Hawkes processes can increase liquidity requirements by 200–400%.
• Fragmentation dramatically amplifies liquidity demand, with 10 pools requiring almost 900% more liquidity than a single consolidated pool.
• Slippage tolerance is a determinant of system viability — tighter tolerances require much deeper reserves.
• Directional flow imbalance is a silent risk, accelerating reserve depletion far faster than linear models predict.

These findings demonstrate why AMM-based settlement cannot rely on traditional liquidity heuristics — and why a new model is required.

An Interactive Simulator for Institutions, Analysts, and Builders

Alongside the release of the whitepaper, LJV has launched an interactive Jackson Liquidity Simulator, enabling users to:

• Visualise slippage curves
• Simulate Poisson vs. Hawkes arrival processes
• Explore imbalance distributions
• Analyse reserve depletion
• View clustering heat maps
• Generate J-score stress distributions
• Examine the full 3D Jackson Liquidity Surface

This simulator provides a hands-on way to experiment with AMM liquidity under real-world parameters.

A J-score Monitoring Dashboard is also in development for FMIs and CBDC pilot teams requiring real-time corridor stress analytics.

Quote From Lewis Jackson

“The future financial system needs a new liquidity model.
We’re moving into a world of instant settlement, automated FX, and tokenised assets — but the liquidity rules haven’t caught up.
The Jackson Liquidity Framework is my attempt to contribute something real: a quantitative, regulator-aligned methodology that institutions can use today.”
— Lewis Jackson, Author, Jackson Liquidity Framework

Download the Whitepaper

The full whitepaper, complete with formulas, derivations, simulation results, and policy alignment, is now available publicly.

→ Read the Jackson Liquidity Framework
→ Try the Interactive Simulator

Watch the full video breakdown of this research

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About Lewis Jackson Ventures

Lewis Jackson Ventures builds research, tools, and intelligence for the next generation of financial infrastructure. Through The Macro, JLF, and a suite of simulation and analytics products, LJV helps institutions navigate the shift toward instant settlement, tokenised markets, and AMM-based financial architecture.

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