Liquidity Hub
Liquidity Hub is a decentralized optimization layer that operates above Automated Market Makers (AMMs). This layer mitigates the problem of fragmented liquidity in DeFi, enabling DEXs to tap into external liquidity sources in order to provide better prices on swaps.
Instead of the typical swap that searches for the best route within a specific DEX's limited liquidity pools, integrating the
Liquidity Hub software protocol allows DEXs to enhance this process by utilizing additional liquidity sources that come from:
Third-party solvers who compete to fill swaps using on-chain liquidity like AMM pools or their own private inventory.
Decentralized limit orders, accessible using API. Enables institutional/professional traders, such as market makers, to submit bids and compete to fill swaps.
Utilizing the Liquidity Hub software allows DEXs to attempt to execute trades without going through the AMM and experiencing AMM price impact. If Liquidity Hub is unable to execute the trade at a better price than the AMM, the trade will fallback to the AMM contract and execute as usual.
Existing DEX LPs generate the same revenue with Liquidity Hub enabled as they would have without it.
Arbitrage loss to MEV can be significant. Since Liquidity Hub matches orders without block producers, it removes MEV losses completely.
Liquidity Hub supports UniSwapX and other similar protocols solver API, enabling anyone to participate in the bidding process right out of the box.
Liquidity Hub protocol will allow DEXs to include a standard CEX book API allowing traditional MMs to participate in DeFi.
Liquidity Hub trades are gasless for users (although solvers may price gas into their fees).
No change in the DEX UI or swap flow for users.
Integrating the Liquidity Hub protocol brings the benefit of aggregated liquidity to any DEX-AMM in DeFi,
benefitting the users, the DEX itself, and Solvers participating in the protocol:
Better execution price
AMM fallback
Trustless system
Gasless trades
Additional fee revenue
Increased volume
Competitive prices
No LP cannibalization
Simple integration
No MEV bidding
Cherry picking orders
High frequency book
All on-chain parts are trustless since contracts verify all actions. However, users may be concerned that Liquidity Hub backend is able to manipulate trades in some way. This concern is mitigated by using the Orbs Network’s decentralized L3 technology.
As part of Liquidity Hub, Orbs Guardians will run software utilizing ORBS-VM, which acts as a decentralized backend that is required for Liquidity Hub’s to run optimally and in a fully decentralized manner.
The Orbs Network has dozens of independent validators running Proof-of-Stake consensus with over $100 million staked. The network has been running in mainnet since 2019.
The Liquidity Hub is a beta version that is still under active development. For more information, please see the terms of use
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