🟪Hybrid Liquidity
LIQUIDITY
Hybrid Liquidity
The launch of BONDDEX introduces hybrid liquidity, a pioneering technology that seamlessly integrates automated market maker pool liquidity into a feature-rich central limit order book exchange.
For traders and API integrators, hybrid liquidity is completely seamless. Order placements, cancelations, and executions work as they do in a standard central limit order book exchange.
The BONDDEX matching engine and smart contracts automatically fill orders with the best combination of pool and order book liquidity.
BONDDEX also will provide a familiar interface for liquidity providers, with liquidity additions and removals using the standard addLiquidity and removeLiquidity functions common to many open source router contract designs.
Advanced operators looking to maximize the potential of hybrid liquidity may also consider:
While integrated into a central limit order book, pool liquidity is entirely passive. Instead, hybrid liquidity relies on arbitrageurs to maintain accurate pricing across markets. The combination of a familiar API and deterministic settlement make BONDDEX a much friendlier and more performant arbitrage platform than standard automated market makers ON BEP20 smart chain
Pool liquidity is continuous. The BONDDEX web client and Order Book REST API endpoints show hybrid liquidity at discrete price levels as a convenience, but the matching engine fills pool liquidity at any limit price.
The amount of pool liquidity available at any price may be computed using formulas derived from the basic
x*y=kequation that governs automated market makers.Derivation of the necessary formulas is beyond the scope of this document, but for interested parties, BONDDEX provides a hybrid liquidity order book model as well as a reference hybrid liquidity order book implementation in its JavaScript SDK.
Note that trading fees impact the base and quote quantities available at a price level.
Most API integrators do not need to implement a hybrid liquidity order book.
BONDDEX automatically includes pool liquidity in level 1 and level 2 order book data sourced from the REST API. Integrators that require a real time order book can also use the official JavaScript SDK or API replicator, both of which provide real time order book data including hybrid liquidity.
Matching Engine
BONDDEX employs a high-performance central limit order book design that continuously matches user orders on a price-time priority basis.
Similar to matching engines employed by traditional, non-crypto exchanges, limit orders are filled at the specified price or better with no risk of order collisions or trade failures.
Support for partial fills enables seamless matching against multiple orders. As a result, the user experience is similar to a high-performance, as centralized exchange.
Example
User A first places a limit buy order for 1 BND at 3,005 BUSD
User B then places a limit sell order for 1 BND at 3,000 BUSD
Assuming no other orders are on the BND-BUSD order book, the matching engine fills user A’s and B’s orders for 1 BND at 3,005 BUSD. User A’s order was placed first and resting on the books, while User B’s order crossed the spread and was able to be filled at a better price than specified.
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