THENA DEX Integrates Orbs’ Liquidity Hub for Enhanced Trading
Daniel Levi
Posted On December 15, 2023
In the fast-paced world of Decentralized Finance (DeFi), liquidity is the heartbeat. But for BNB Chain traders, moving through fragmented pools and limited depth can be like navigating rough waters. That’s where THENA comes in—a decentralized exchange on the BNB Chain known for its user-friendly interface and top-notch trading tools.
Today, THENA announced that it’s teaming up with Orbs, a layer-3 platform known for bringing innovation to smart contracts. This collaboration involves integrating Orbs’ game-changing Liquidity Hub, and it’s set to redefine the game for THENA and its community of traders.
The main challenge in the world of Decentralized Finance (DeFi) is dealing with scattered liquidity across various DEXs. Isolated pools create limitations in options and depth, often resulting in price slippage—a situation where the executed price differs from the intended due to a shortage of assets. Orbs’ Liquidity Hub takes on this challenge by connecting THENA to a vast external network of liquidity reserves. It’s like unlocking access to a hidden treasure trove of assets.
This integration brings significant benefits for THENA’s traders. They will now be able to tap into additional liquidity on the BNB Chain network, which was previously inaccessible through the standard AMM. The Liquidity Hub, powered by Orbs’ L3 technology, brings lower fees, MEV protection, gasless transactions, increased capital efficiency, a simplified user interface, and more. Notably, this integration is only the second of its kind for Liquidity Hub by Orbs and is one of the few in the entire DeFi space that aggregates liquidity from both on-chain and off-chain sources to a DEX.
Liquidity Hub stands out as a fully decentralized, permissionless, and composable DeFi protocol developed by the Orbs project and fueled by the Orbs Network. With this collaboration, THENA’s traders gain access to all the liquidity that the BNB Chain offers, and the best part is that there’s no additional cost.
Orbs, operating as a decentralized protocol with a public network of permissionless validators using PoS, has staked tens of millions of dollars in TVL. The project introduces the concept of L3 infrastructure, leveraging the Orbs decentralized network to enhance the capabilities of existing EVM smart contracts. This opens up a new realm of possibilities for Web 3.0, DeFi, NFTs, and GameFi.
“Orbs is a decentralized protocol executed by a public network of permissionless validators using PoS, staked with tens of millions of dollars in TVL. Orbs pioneers the concept of L3 infrastructure, by utilizing the Orbs decentralized network to enhance the capabilities of existing EVM smart contracts, opening up a whole new spectrum of possibilities for Web 3.0, DeFi, NFTs, and GameFi.”
How Liquidity Hub Works
Liquidity Hub operates as a layer 3 (L3) infrastructure software, serving as an optimization layer above the Automated Market Maker (AMM). This technology is designed to access external liquidity, providing better price quotes and minimizing price impact.
Unlike the conventional swap process that looks for the best route within the limited liquidity pools of the DEX, Liquidity Hub enhances this by incorporating additional liquidity sources:
- On-chain solver auction: Third-party solvers compete to fill swaps using on-chain liquidity, which includes AMM pools or their private inventory.
- Decentralized orders via API: Accessible through API, decentralized orders allow institutional and professional traders, like market makers, to submit bids and compete to fill swaps.
Liquidity Hub enables DEXs to attempt trade execution without relying solely on the AMM and facing potential price impact. If the layer can’t execute the trade at a more favorable price than the AMM, the transaction reverts to the AMM contract and proceeds as usual.
In essence, Liquidity Hub aims to enhance a trader’s experience by providing an alternative execution pathway. If Liquidity Hub doesn’t prove competitive – meaning it would execute at a worse price for the user or can’t execute at all – the swap follows the traditional route through the AMM contract.
Liquidity Hub Architecture & Product Overview
Liquidity Hub is managed through a combination of an on-chain contract (deployed alongside the AMM contract) and backend logic (operating on-chain via Orbs decentralized L3 nodes). This setup ensures the safety of end-users funds and prevents significant price manipulations.
For regular users engaging in swaps, there’s no need to be aware of Liquidity Hub’s existence. The on-chain contract of Liquidity Hub ensures that the execution price of a swap is better than the one on the AMM contract. If Liquidity Hub isn’t competitive, the swap is simply avoided, eliminating the need for trust as this guarantee is implemented at the contract level.
Some of the Liquidity Hub logic is executed off the DEX’s underlying chain, mitigating off-chain risks through Orbs L3, as detailed below. Managing the data structure off-chain allows for quick addition and removal of orders from Liquidity Hub within milliseconds, without waiting for a new block and without incurring gas costs. This feature is particularly appealing to market makers, providing a speed comparable to centralized exchanges (CEXs).
All funds are stored on-chain in a non-custodial manner. Participants placing orders in Liquidity Hub retain control over the funds in their wallets. The Liquidity Hub contract is approved to initiate transactions that transfer funds between accounts upon a match. Order verification always occurs on-chain through the Liquidity Hub contract, ensuring that execution meets the requirements of both parties and that the execution price surpasses that of the AMM.
Key Product Specifications of Liquidity Hub:
- No User Interface Change on DEX: The integration of Liquidity Hub maintains the DEX’s familiar user interface, ensuring a seamless and intuitive trading experience.
- API for Solvers + Decentralized Order Interface for Market Makers (MMs): Liquidity Hub provides an efficient API for solvers and a decentralized interface for Market Makers, streamlining liquidity provision and trading.
- Minimal to Zero Latency Execution for MMs: Trades are executed with minimal to zero latency, allowing users to capitalize on real-time market movements.
- Token Spending Approval via MetaMask: Users authorize token spending through MetaMask, retaining control and security over their transactions.
- Funds Remain in User Wallet Until Execution: Users’ funds stay in their wallets until trade execution, enhancing the security and trust of the trading process.
- Gasless Trades for Users: Liquidity Hub offers gasless trades for users, significantly reducing transaction costs.
Continuing the Standard
The Liquidity Hub protocol, powered by Orbs L3 technology, has set the industry standard for achieving the best price without leaving the DEX.
To date, the protocol has been successfully implemented by QuickSwap on Polygon and, more recently, by Thena on the BNB Chain, facilitating over $12 million in trading volume.
