In Brief:
- IDEX launched its v3 Hybrid Liquidity DEX on Polygon.
- The company has merged a high-performance order book with AMM to make this ‘Hybrid Design’.
- This model will offer investors trading rewards, cheap transaction fees, etc with the power of real-time execution and stop-losses.
San Francisco-based decentralized cryptocurrency exchange (DEX), IDEX, has announced the launch of its v3 Hybrid Liquidity DEX on the Ethereum scaling solution Polygon.
This is IDEX’s first Hybrid liquidity DEX, combining a high-performance order book with an automated market maker (AMM). The model will allow traders to get the best spreads, easily provide liquidity, and avoid failed transactions. All these with the power of real limit and stop-loss order.
The hybrid model will combine traditional order book functionalities with automated market maker (AMM) liquidity pools in a bid to fetch higher financial returns for the services liquidity providers. The model will also offer typical investing tools such as limit orders, real-time execution, and stop-losses.
Traditional order books are the typical design of many centralized cryptocurrency trading platforms. They match buyers and sellers at various prices and depend on market makers to help execute trades at various price points. This approach is heavily driven by the market makers for it to be successful.
Whereas, AMM omits market makers from the trading equation altogether. This allows users to make trades from several pools of liquidity for specific pairs. Not only this, users are incentivized
for trades made in each pool. This decentralized design allows anyone looking to earn extra on their holdings.
Each design has its disadvantages, for example, AMMs often pose unpredictable slippage costs to traders. In this latest launch, IDEX is trying to merge the best of both designs by introducing its “hybrid liquidity” solution. Consequently, it will help the platform to overcome the shortcomings of traditional DEX platforms with promising low fees and incentives.
According to IDEX, operating on the Polygon network assists in lowering transaction costs to the value of “10,000-100,000 times cheaper” as compared to the cost witnessed on Ethereum layer-one.
Yesterday, 21Shares, a cryptocurrency exchange traded product (ETP) issuer declared about launching Europe’s first-ever crypto product linked to the performance of Polygon. Polygon has become the preferred choice for many crypto exchanges and tech giants for launching their new products and offerings.
