Orbs’ Layer-3 infrastructure network introduces the Liquidity Hub, aiming to address DeFi’s liquidity fragmentation challenges.
Responding to the complexities of liquidity fragmentation in the decentralized finance (DeFi) arena, Orbs, a blockchain infrastructure project, has announced the introduction of its Liquidity Hub in partnership with QuickSwap.
Through liquidity access and distribution, Orbs’ Liquidity Hub aims to refine the trading experience for DEX users who have frequently faced inflated trading prices due to fragmentation. The hub utilizes a blend of on-chain smart contracts and off-chain logic for liquidity providers on Orbs’ decentralized L3 nodes.
The Liquidity Hub offers DEXs the ability to attempt trade executions outside the conventional bounds of automated market makers (AMM). This ensures that trades have the potential for a more favorable rate than the hub’s intrinsic smart contract, or they can be seamlessly redirected to the AMM’s existing contract:
“By bringing the benefits of aggregated liquidity to any DEX-AMM, Liquidity Hub provides better execution prices for traders with guaranteed MEV protection for liquidity providers.”
The Liquidity Hub’ Maximal Extractable Value (MEV) protection for liquidity contributors ensures “no impact on their incentives.” The hub’s design as a flexible DeFi protocol component also allows easy interfacing with solvers, boasting a democratic platform where all market entities can partake in the bidding process for swaps.
“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,” said Ran Hammer, vice president BizDev of Orbs:
“Using Liquidity Hub, existing DEX-AMMs can stay competitive by tapping into additional liquidity sources, without jeopardizing the incentives for liquidity providers.”
With security as its main feature, the Liquidity Hub ensures that assets involved in transactions remain on-chain as non-custodial principles inherent to DeFi. Transactions are managed through the hub’s smart contract, cementing the confidence of traders that the terms of their trades are upheld.
Strengthening the system further, the Orbs network integrates permissionless validators, named “Guardians,” functioning within a proof-of-stake consensus algorithm.
