The Future of On-Chain Liquidity | Ran Hammer - Orbs

of the best use cases we found for that is twop and limit orders for decentralized exchanges um I'm sure everybody here knows what a limit order is it's an order that sits there waiting for uh the right price it then gets executed at the right price and tuop is time weighted average price it means that you know I want to do a large trade um either I want to um do DCA so I want to like go in gradually into another position or out gradually out of a position or I want to neutralize volatility so I would cut the trade into a bunch of smaller trades and get them executed um you know I can take $1,000 do $100 trade each over you know intervals of 10 minutes or 1 hour or one day or one week um and that's twop that's stuff that's very um used in centralized exchanges and in Trad fi but it's very hard to implement on an amm so with orbs layer integrated you can have two open limit for dexes we have 12 indexes integrated now and uh we're growing that um with on seven different chains um 13,000 T up orders placed 5,400 different wallets and over $40 million in open interest so that's going very very well um but that's I would say like an easy use case one it's not something you can really monetize there's not so much money in this and no not so much uh pral Revenue you could put a little bit of a fee on limit orders but it's not that interesting not that material um and also we feel like our Network could do compute that's more robust and we want wanted to look for a right use case to use this to use it for um and and that's and that's you know and that gave us to to a place where we came back and kind of thinking about what's going on where is it valuable and one of the things that we have a very strong conviction on is that the next bull market is going to be on chain this is something we strongly believe in um and there's many reasons why we think that one um you know we do think that see month to month grow on um on on Dex volumes we do see Dex volumes grow this is supposed to be a graph our designer here was very creative but this is the graph so essentially uh we do see growth month to month in inax volume and we do see a lot of more onchain activity um also in looking at regulation we we have seen obviously uh the Crackdown on on CI you know we saw there's there's you know the SEC has been super aggressive uh with binance with coinbase uh with other venues as well and tokens while on defi we do see that at least The Regulators kind of um approach to defi still hasn't been defined so I'm not necessarily saying it's positive I'm just saying we don't see like active enforcement actions against def5 protocols at this point um and what happens is specifically here in the US we are seeing a lot of people moving out of um CFI and into defi I think a lot of the people trading today are D5 first and also one of the interesting thing we have been seeing um is that a lot of the people actually the good like new cool kind of assets are first trading on defi before they even get get to the CI so for those you know dents who are looking for like the newest assets the newest mem coins the newest things going on you do see that you know they need to trade on D5 before it get to CI because honestly you know if you wait until a token is listed on coinbase there's a very good likelihood that all the people who bought in defi are going to dump on you then one when you get listed on centralized exchange um um and this just you know we have the example of whiff but that's one of many tokens that you can see that the trading was very strong before CI and and you know market price like price movement was positive um on when it was traded on defi only and then when it came to CI you can see um you know price went down a little bit sometimes it keeps going up but still if you want the newer assets you'd have to start trading them when they get listed on dexes way before the centralized exchanges um and obviously there's counterparty risk right like we we all known what happened last few years we've all seen FDX CSUS and others um you know billions lost funds Mis appropriated um it's not that defi is without risk but at least it's not that kind of risk it's different risks and uh you know you could hedge them I think better in D5 than you could in C um so what's preventing from everything being on chain um one thing is is user experience like user experience is still lagging behind you know uh again I've been I've been in this industry for you know since 27 2015 that's almost 9 years now everybody's talking about like next year they're going to figure out this the whole uiux thing is going to be amazing still still bad you still need your metamask you open it you still it's most like web- based and not not like mobile based oh it's getting better um so still the onchain user experience in defi is worse than on CI uh we have seen a lot of improvements you know there's a bunch of other protocols working on like account abstractions and Def wallets and stuff like this get it's getting better um one specific project we like a lot in this space is is tone we've been building on as I mentioned um and that's because we see we think telegram is emerging as kind of the Prime venue for web 3 a lot of the web 3 activities are going on on Telegram and most people I me meeting here in the conference are primarily using telegram um and we've seen we've seen unibot and mro and a lot of other protocols um using um telegram as the main kind of interface and yeah you know telegram itself has vouched on a on on a chain it's called ton as their exclusive chain that they're using and um you know they they have an an an a telegram wallet integrated within the telegram messenger I'm not sure if this functionality is specifically open in the US I think maybe it's not but everywhere else in the world you can get it um but essentially you know you have an integrated um um decentralized wallet non-custodial wallet uh within your telegram app and you can integrate with ton and other assets um and interesting deps all inte telegram web apps so I we think this is a very good stride to um you know in terms of uxix for like user kind of experience integrating with um crypto and blockchain so specifically this is one project we've been heavily building on um we're doing a bunch of stuff on ton uh we're the biggest RPC uh we're the tool to um to M new tokens we're the biggest governance platform uh but this one thing one kind of uh thing that we think could help um progress adoption of onchain activity and the other thing I think is even more material than just ux is prices are generally worse on chain um you know we've discussed some products are first rated on Defi and then get to CI but once projects are on Defi and CI usually you would get a better price and you would get better execution on CI order book based exchanges as compared to amms um and yes and onchain prices are not competitive and the reason they're not competitive it's because um just just uh liquidity fragmentation um liquidity is highly fragmented um across different chains across different amm across uh across on the same chain and across different pools within the same same amm um and what happens effectively is the dexes at least on the UI level cannot compete with the aggregators most users will go to like 1 in Paras swap one of these guys when they want to swap um because the um price you would get on a amm UI is just not competitive and um you know one interesting case study we've seen is we've seen with Unis swop X that was launched in the summer is now operational and growing in volume is where essentially you have Unis swop that's the biggest obviously biggest amm in the ecosystem first amm probably first amm bunker would would not agree but first big amm um um they essentially integrated an aggregator into their own UI so today any any swap that comes in into Unis swap they check against uh other liquidity sources market makers and potentially uh they would rather it not through their amm at all so this is was a kind of a first stride we saw of an amm coming saying you know we can't uh really compete with the aggregators so we're going to become an aggregator ourselves and um on that kind of basis we came with liquidity Hub um liquidity Hub is a project that we've built built on top of the orbs Network and essentially um it is kind of similar to Unis swap X in in in the idea is we tap into external liquidity from within aex UI and I'll explain so you know right now you have a user I have a couple of our partners here listed the and quick swap you know a user comes into Quick swap for example on polygon um you know they want to swap so the way it was today they just interact directly with the pools on that specific amm using whatever router you know used to have like a V2 router then you had the most advanced more advanced like V3 routers and now a lot of the projects are using somebody else to do the routing like Paras swap or open ocean or odos um but still you're limited to that liquidity what we do with liquidity Hub is we check against outsourced liquidity so every time a swap comes into Quick swap for example today liquidity Hub checks against Outsource liquidity we see whether we can provide a better price as compared to the amm price and if we do get a better price then it's being routed through that external liquidity and there we have um different types of liquidity we have onchain solvers so Paras swap odos open ocean kyber Rango um bbop all these guys are acting as solvers and we have market makers um we have benold as Market maker we have JC's as Market maker we're integrating new market makers um as we speak but potentially with that we can improve price and right now we are improving price for something like 30% of the trades coming into the mm uh UI and obviously this creates a place for dexes to monetize as well because you know once there's user saving you can take fees and those fees can go one to the amm team I'm not sure if people here know but amm is something that's very hard to monetize um so it's it's money for the amm teams it's money for you know you can do extra additional rewards for LPS to incentivize liquidity for your pools and obviously this is Revenue generating for the ORS protocol as well and and this is just a slide kind of showing the potential you know the price you can get with just stepping into um and you know the pro the the better the liquidity the more the tvl um the better price you can give to users and then you see if if if I do just quick swap themselves I have 125 million if I expend to the entire polygon chain like polygon POS chain I can get 950 million once I expand to like all of on chain tvl with like cross chain solvers Etc I can get like 60 billion and if I have offchain solving like with market makers who are solving against binance or okx or coinbase I can get 600 billion worth of liquidity so the more liquidity the better the price you can get and that's essentially what we're doing with liquidity Hub is tapping into that additional liquidity um and yeah and and and just going back to what orbs is so obviously this kind of thing does require so we do use a Dutch auction model and a lot of the action is done on chain no assets are being transferred to the orbs or anything but we do have a bit of a compute coming in here doing all this kind of comparisons and integrating the amm ETC and all of this is being executed on the orbs layer so going back to where we started from is really trying to find the best product fit for our layer for our technology uh we do believe this is it um with liquidity Hub and providing our decentralized back end to power essentially uh the auction for liquidity Hub and and do the execution and yeah we do believe that yesterday people were like competing over tvl everything that you know Dex says were trying to achieve or def BR was trying to achieve is tvl we do believe Now volume is King I think in this kind of bull market we'll see projects competing over volume and revenue way before tvl because tvl is something that's you know it's a good street cred and it's nice to be high up on defi Lama but end of the day it's very hard to monetize so we do believe receive volume as King in this cycle um and yeah we do work with a bunch of dexes somehow some of the logos didn't load here but uh we work with a bunch of dexes um using t-w limit liquidity Hub and and some of the other products we we offer um think yeah many chains many projects here we go um yeah and spot is just is just a start for us we are looking at um additional places where our technology could be uh implemented and one of the places we've identified as interesting is onchain derivatives onchain derivatives is quite small still we all know you know a couple of big projects everybody knows GMX and dydx they're doing like order book based uh derivatives but they're still quite small and also they're not super Capital efficient in the way they operate that's one of the reasons they're not growing more than they are now but you know on on CI derivatives is very big like binance derivativ is very big okex derivativ is very very big um and and um yeah and if in spot we see like around 20% of the volume is is spot volume happens on chain then um it's only it's not even 2% of the of the Futures volume um and and this is a place where we think that if we can get more liquidity from um CI into defi in terms of derivatives we can get um much better execution on chain and people don't have to go to um centralized exchanges for this um and for this reason we have a partnered with project called CIO I'm not sure if you know them CIO are doing intent based um intent based execution for derivatives so essentially um it's it's an RFQ based system and not an order book system but users can go on chain open um open uh interest open a trade and then you have hedgers who are taking the other side of the trade and they hedge that against CI based on RFQ um Simo is the engine for it and they right now they have two UI integration one is pheno on BNB and the other is intent X which is now on base and I think on launching on blast soon I'm not sure if I'm supposed to say that um but uh that's also something that's very very interesting for us so we have invested in all three of these companies and are now building um one we're building a decentralized hedger to to hedge open interest from between onchain and offchain and then we're going to collaborate with them on building um essentially the bidding system for hedgers to compete over open interest that's open by users and this is something that you know if we if we can scale this right I think we'd have massive um we have massive volumes as people are very interested in in trading derivatives as we are seeing in CI um yeah so thank you for having me super happy to talk about what whe building um I think this is a very very very um exciting cycle interesting cycle I think we're going to see way more things happening in defi as compared to before even more than defi summer all the new chains coming up all the new Proto protocols coming up and I think it's a privilege to still be here uh for this cycle and building and uh yeah looking forward thank [Applause] you all right thank you ran do you want to do questions any questions for ran anyone hi um real quick what centralized exchanges have you partnered with sorry what centralized exchanges have you partnered with so so depends on the product um for liquidity Hub specifically we're agnostic so it depends on what the market makers are using um I think most of them are using binance right now uh but you know they can use whatever maybe coin b as well but we're agnostic there's like like a Dutch trade that's a Dutch auction model so wherever they can Source a better prise they can participate they can also do it with their own liquidity had they wanted to um but yeah I think most of them not H with binance for futures specifically in Sim's current model um you know because Futures are like non-fungible you have like different type of Futures in like every every venue so specifically the hedging is against binance with this product the way it is today uh potentially that could be improved in future versions to have multiple counterparties for the hedging thank you anyone else questions yeah cool thank you all right thanks Ry