​​Orbs teams up with QuickSwap to introduce Liquidity Hub

Orbs, a Layer‑3 infra­struc­ture net­work designed for decen­tral­ized appli­ca­tions, has just intro­duced Liq­uid­i­ty Hub. This inno­v­a­tive plat­form aims to pro­vide aggre­gat­ed liq­uid­i­ty to any decen­tral­ized exchange auto­mat­ed mar­ket mak­er (DEX-AMM).

The first launch of Liq­uid­i­ty Hub has been car­ried out in col­lab­o­ra­tion with Quick­Swap, as per lat­est infor­ma­tion shared with Fin­bold on Sep­tem­ber 18. The method has been specif­i­cal­ly devel­oped to tack­le the esca­lat­ing issue of liq­uid­i­ty dis­per­sion with­in the realm of decen­tral­ized finance (DeFi), lead­ing to ele­vat­ed pric­ing for traders using decen­tral­ized exchanges (DEX).

The pri­ma­ry objec­tive of Liq­uid­i­ty Hub is to enhance liq­uid­i­ty and max­i­mize the ben­e­fits of its sav­ings for traders. The sys­tem uti­lizes a com­bi­na­tion of on-chain smart con­tracts and off-chain log­ic, which is facil­i­tat­ed by Orb’s decen­tral­ized L3 nodes.

This fea­ture allows DEXs to con­duct deals with­out rely­ing on auto­mat­ed mar­ket mak­ers (AMMs) and so avoid the typ­i­cal pric­ing effect. Addi­tion­al­ly, it ensures that swaps are con­sis­tent­ly com­plet­ed at a supe­ri­or price com­pared to the one pro­vid­ed by the DEX’s own smart contract. 

In the event that Liq­uid­i­ty Hub encoun­ters an inabil­i­ty to exe­cute the trans­ac­tion at a more favor­able price, the deal will revert to the smart con­tract of the AMM and pro­ceed with reg­u­lar execution.

Liquidity Hub

Con­se­quent­ly, Liq­uid­i­ty Hub endeav­ors to opti­mize the trader’s expe­ri­ence by facil­i­tat­ing safe trans­ac­tion exe­cu­tions. The whole of the funds are stored on the blockchain in a way that does not involve any third-par­ty cus­to­di­al services. 

The exe­cu­tion of orders takes place on the blockchain through the smart con­tract of the Liq­uid­i­ty Hub. This process ensures that the swap sat­is­fies the needs of all par­ties involved, while also achiev­ing a more favor­able exe­cu­tion price com­pared to the AMM. Upon con­fir­ma­tion of the swap, the trans­fer of funds takes place on the blockchain between the two involved parties. 

Protection for liquidity providers

Liq­uid­i­ty Hub dis­tin­guish­es itself with a unique Max­i­mal Extractable Val­ue (MEV) pro­tec­tion solu­tion for liq­uid­i­ty providers, assur­ing no influ­ence on their incen­tives. The Liq­uid­i­ty Hub is a com­plete­ly com­pos­able DeFi pro­to­col build­ing piece that can con­nect to many solvers out of the box, allow­ing any­body to engage in swap bidding. 

Mean­while, Orbs’ decen­tral­ized archi­tec­ture pre­vents trade manip­u­la­tion, with trans­ac­tions enabled by a secure net­work of per­mis­sion­less val­ida­tors known as Guardians who use a proof-of-stake con­sen­sus method. 

Ran Ham­mer, Orbs VP BizDev, stated:

״Liq­uid­i­ty frag­men­ta­tion is one of the biggest issues cur­rent­ly pre­vent­ing DeFi DEXs from being able to com­pete with cen­tral­ized off-chain venues and on-chain vol­umes to aggre­ga­tors. Using Liq­uid­i­ty Hub, exist­ing DEX-AMMs can stay com­pet­i­tive by tap­ping into addi­tion­al liq­uid­i­ty sources, with­out jeop­ar­diz­ing the incen­tives for liq­uid­i­ty providers.”

All in all, Liq­uid­i­ty Hub brings the advan­tages of pooled liq­uid­i­ty to any DEX-AMM, result­ing in improved exe­cu­tion costs for traders and assured MEV pro­tec­tion for liq­uid­i­ty providers. It allows any DEX plat­form to ben­e­fit from greater liq­uid­i­ty to sup­port larg­er trad­ing vol­umes while gen­er­at­ing extra rev­enue from trad­ing fees.