IDEX, a cryptocurrency decentralized exchange (DEX) platform, today announced the launch of IDEX Hybrid Liquidity (IDEX HL), a new feature that combines an order book and trading engine with liquidity pools of an automated market maker (AMM).
The unique exchange design protects users from the negative aspects of AMMs, including failed trades and front-running, by instantly executing trades against the best combination of limit orders and pooled liquidity. This approach generates higher returns for liquidity providers while also allowing for more advanced trades like stop-loss and limit orders.
Challenges plague the DEX ecosystem such as failed trades and front-running
Research indicates that 2-5% of transactions on Ethereum-based DEXs fail due to complications like too much slippage or insufficient gas prices. Between April 15 and April 21, roughly 1.1 million transactions were made on Uniswap, with 241,262 failings — representing the largest number of transaction failures across the entire Ethereum network. Additionally, a Cornell study discovered that six select DEXs had more than 500 bots generating up to $20,000 a day through front-running — resulting in billions of dollars earned through malfeasance.
IDEX HL incorporates the liquidity pool structure that has made AMMs so popular; enabling anyone to deposit their funds and become a market maker. This structure is now connected with IDEX’s high-performance trading engine, which allows for fair, real-time trade execution. The design eliminates issues like front-running and trade failures; and also allows for best-price execution across both pooled liquidity and limit orders, and generates higher returns for liquidity pool depositors.
“The IDEX Hybrid Liquidity Pool is the next evolution of the DEX, as we continue to explore innovative methods to deliver the most optimal trading experience for users. IDEX delivers the best of DEXs and centralized exchanges with the non-custodial elements and the ease of market-making through AMMs. By combining a high-performance trading engine with smart-contract-based custody and settlement, users get the best of both worlds.”
– Alex Wearn, CEO of IDEX
This news follows IDEX’s February launch of its trading infrastructure on Binance Smart Chain to provide efficient DEX trading. The initiative was made possible by the multi-chain solution that exports IDEX’s trading experience to new blockchains. The upgraded IDEX BSC platform improves the trading experience for users by opening access to new assets and reducing trade settlement costs by up to 1000x.