Virtual Order Books
Orion's Continuous Innovation in Liquidity Management
Last updated
Orion's Continuous Innovation in Liquidity Management
Last updated
Imagine you're at a big fruit market. Each stall in this market sells fruits, but some stalls only sell apples to oranges, while others might sell bananas for grapes. Now, instead of running around the entire market to find the best deals, what if you had a magical notebook that continuously updates itself with all the possible fruit exchanges and their prices?
VOBs are like that magical notebook for the cryptocurrency world. They keep track of all the possible trades you can make, even the complex ones that involve multiple steps, and show them in one place. So, instead of checking multiple stalls (or exchanges), you can just look at this notebook and find the best deals instantly!
Orion's VOBs stand as a testament to the platform's commitment to addressing the intricate liquidity challenges in the crypto market. These VOBs curate an aggregated order book that not only encompasses direct liquidity sources but also unveils the potential liquidity from complex swaps. In such a swap, Token A is traded for Token C via an intermediate Token B, optimizing the use of available liquidity and enhancing arbitrage opportunities.
While other platforms might calculate complex swaps on an ad-hoc basis, what truly distinguishes Orion is its capability to continuously calculate these swaps. This continuous and exhaustive computation is no small feat, but it's essential for creating a dynamic order book of complex swaps. The result? New and competitive prices, and the discovery of fresh arbitrage opportunities that might otherwise go unnoticed.
Furthermore, Orion's VOBs seamlessly integrate both centralized exchanges (CEXs) and decentralized exchanges (DEXs) into this aggregated view. This means that traders get a comprehensive picture, whether the liquidity source is a CEX or a DEX. With its continuous computation and integration of both CEXs and DEXs, Orion's VOBs are redefining the standards of crypto trading.
Imagine a Farmer's Market: At each stall, there's a list where farmers write down how many apples they want to sell and at what price. Buyers can also write down how many apples they want to buy and how much they're willing to pay. This list helps everyone see and decide on the best prices. In the world of trading, this list is called an Open Order Book or OOB.
Web3 version: An Open Order Book (OOB) is a traditional system used by centralized exchanges like Binance, KuCoin, and OKX. It's essentially a ledger that lists all the buy and sell orders for a specific cryptocurrency pair, like BTC/USDC.
How does it work? Imagine a marketplace where people shout their offers: "I want to buy 1 BTC for 40,000 USDC!" or "I'll sell my BTC for 41,000 USDC!". These offers are then listed on a board (the order book) for everyone to see. The OOB matches these buy and sell orders, facilitating trades.
Think of a Magic Money Machine: Instead of a list like at the Farmer's Market, imagine there's a magical machine in the middle of the market. You put in oranges, and the machine gives you apples based on how many oranges and apples are already inside it. The more people use it, the rates might change. This machine is like a Decentralized Exchange using an Automated Market Maker or AMM
Web3 version: Unlike the traditional OOB, AMMs like Uniswap and PancakeSwap don't rely on buyers and sellers to determine prices. Instead, they use a mathematical formula to set the price based on the ratio of tokens in a liquidity pool.
How does it work? Imagine a magical vending machine (the AMM) that can swap ETH for LINK. The price depends on how many ETH and LINK coins are inside the machine. If you add more ETH and take out LINK, the price of LINK in terms of ETH goes up.
Picture a Super List: Now, imagine combining the Farmer's Market list (OOB) and the Magic Money Machine (AMM) into one big list. This list not only shows direct apple-to-orange trades but also potential apple-to-banana-to-orange trades. It's like having a super list that gives you more options and better deals. This super list is what we call a Virtual Order Book or VOB.
Web3 version: Orion's VOB is a groundbreaking solution that combines the best of both OOB and AMM worlds. It aggregates liquidity from both centralized exchanges (like Binance) and decentralized platforms (like Uniswap) into one unified order book.
How does it work? Imagine a super-powered marketplace that not only lists direct offers (like "I'll sell BTC for USDC") but also potential offers made possible through complex swaps (like "I'll sell BTC for LINK using USDC as a bridge"). This is what Orion's VOB does. It shows both direct trades and potential trades made possible through multi-step swaps.
Envision Multiple Markets Merging: Let's say there are many different Farmer's Markets across the city, each with its own list of trades and magic machines. Now, imagine if all these markets combined their lists and machines into one giant market. This would mean more options, better prices, and more trades for everyone. In trading, when we combine the liquidity (or available assets) of different exchanges, it's called Cross-Exchange Liquidity.
Web3 version: It's the ability to tap into liquidity from multiple exchanges, both centralized and decentralized, at once.
How does Orion stand out? Orion is unique because it doesn't just pull liquidity from different sources; it also enables complex swaps on centralized exchanges like Binance, blending them with liquidity from AMMs like Uniswap. For instance, if you wanted to swap USDC for LINK but the best route was USDC to BTC on Binance and then BTC to LINK on Binance, Orion makes it possible in a seamless and efficient manner.
By integrating these advanced features, Orion offers a trading experience that's unparalleled in the crypto world. Whether you're looking for the best price, deep liquidity, or complex trading routes, Orion's got you covered.
Orion's ability to tap into both CEX and DEX liquidity is powered by three core technologies:
Liquidity Pools Service: This technology analyzes data from liquidity pools, allowing Orion to synthesize order books from DEXs' AMM models.
Liquidity Node Network: This facilitates the connection of CEXs to Orion, channeling their liquidity into the Orion ecosystem.
Aggregator: Acting as the heart of the system, the Aggregator processes and combines order books from both the Liquidity Pools Service and the Liquidity Node Network, resulting in a unified, cross-exchange order book.
In the ever-evolving landscape of cryptocurrency trading, Orion's Virtual Order Books (VOBs) emerge as a beacon of innovation, addressing the multifaceted challenges of liquidity. By continuously calculating complex swaps and integrating them into a dynamic order book, VOBs offer traders a comprehensive and real-time view of the market, encompassing both direct and potential liquidity sources. This continuous computation not only ensures competitive pricing but also unveils previously hidden arbitrage opportunities. Furthermore, with the seamless integration of both centralized and decentralized exchanges, VOBs provide a holistic trading experience, bridging the gap between traditional and decentralized platforms. As the crypto market continues to grow and diversify, Orion's VOBs stand poised to redefine the standards of trading, ensuring that traders have the tools they need to navigate this dynamic market effectively and efficiently.
