Orbs has rolled out its Liquidity Hub, a Layer-3 network infrastructure tailored for decentralized applications. Announced on September 18 in collaboration with QuickSwap, this initiative aims to tackle the pressing issue of liquidity dispersion in the burgeoning DeFi sector.
Significantly, the Liquidity Hub serves as a liquidity reservoir for any DEX-AMM (Decentralized Exchange-Automated Market Maker). Consequently, it amplifies liquidity and paves the way for traders to capitalize on cost-saving opportunities. Moreover, the hub integrates on-chain smart contracts with off-chain logic, facilitated by Orbs’ decentralized L3 nodes.
Additionally, the platform offers a unique advantage by eliminating AMMs from the trading equation. This move allows DEXs to sidestep the usual price impact, ensuring that all swaps are finalized at rates superior to those set by DEX’s smart contracts. If the Liquidity Hub fails to secure a better price, the AMM’s smart contract steps in to complete the transaction as planned.
Hence, the Liquidity Hub enhances the trading experience by streamlining transaction execution. All funds are securely stored in a decentralized ledger, eliminating the need for custodial services. The hub’s smart contract operates directly on the blockchain, ensuring fair and efficient order execution for all parties involved.
For liquidity providers, the Liquidity Hub offers an innovative approach to Maximal Extractable Value (MEV) protection. This ensures that providers’ incentives remain unaffected. The hub is a fully composable DeFi protocol with seamless connectivity to multiple solvers, democratizing swap bidding for all.
Ran Hammer, BizDev VP for Orbs, emphasized the importance of addressing liquidity dispersion to maintain a competitive edge. By leveraging Liquidity Hub, existing DEX-AMMs can access new liquidity pools without undermining incentives for liquidity providers.
The two primary outcomes of using Liquidity Hub are improved execution costs for traders and robust MEV protection for liquidity providers. Increased liquidity enables DEX platforms to handle higher trading volumes, thereby generating more revenue from trading fees.
The Liquidity Hub promises traders better execution costs and offers liquidity providers enhanced MEV protection. By ramping up liquidity, DEX platforms can handle heftier trading volumes, leading to a surge in trading fee revenue.
