DeFi
Breaking DeFi Barriers: Overcoming Liquidity Fragmentation with Omnichain Trading Infrastructure
By unifying liquidity across blockchains, streamlining the trading experience, and providing robust support for diverse trading needs, omnichain infrastructure is revolutionizing DeFi, driving efficiency and broader market participation.
As decentralized finance (DeFi) continues to grow, a critical problem of liquidity fragmentation has emerged. A investigation points out that over $100 billion in assets are locked in DeFi protocols, but fragmented liquidity reduces overall market efficiency.
A report predicts that Layer 2 (L2) solutions, designed to increase blockchain scalability, will propel Ethereum’s market cap to $1 trillion by 2030. watch that the number of L2 networks on Ethereum has increased by 40% over the past year, worsening the problem of fragmentation.
Cumulative total value locked Ethereum L2. Source: L2beat
Another study finds that reconciling assets across L2s increases processing times by 30% and costs by 25%, contributing to user frustration and market inefficiency. When assets and transaction volumes are scattered across different L2s, users need to bridge different layers, leading to high transaction costs and security risks.
These challenges not only discourage casual users, but also pose a barrier to broader adoption of DeFi, highlighting the importance of interoperability and the importance of multi-chain alternatives.
Orderly Network: Redefining DeFi with Cross-Chain Solutions
A permissionless liquidity layer for Web3 trading, Ordered network aims to redefine DeFi by providing a robust omnichain trading infrastructure that unifies liquidity across different blockchains. This approach addresses critical challenges in the DeFi sector by providing liquidity and settlement support for any asset, chain or interface, thereby improving efficiency and trading experience across various platforms.
To achieve these capabilities, Orderly has implemented the Orderly Chain, which serves as the primary settlement layer and ledger for all transactions, including user balances and trading data. The platform is built on OP Stack, which facilitates the development and deployment of blockchain applications.
Orderly Network combines an order book-based trading system with a liquidity layer for spot and perpetual. Source: Ordered Network
The ordered chain leverages Celestia’s data availability to ensure constant access to data and LayerZero’s cross-chain protocol to facilitate seamless transfers between blockchains. As one of the most active protocols on LayerZero, Orderly ensures smooth operation even during potential downtime of the corresponding engine order book. This resilience allows brokers to manage trading positions and user balances without interruption with confidence. According to recent data, Orderly is the largest user of the Celestia network, accounting for over 35% of its data. It also remains the second largest protocol on LayerZero, accounting for 28% of all messaging on LayerZero.
Orderly’s system offers cross-network features that improve transaction efficiency, increase liquidity, tighten spreads, and integrate features that were previously inaccessible in DeFi. This functionality is similar to the CME operating model in traditional finance. Orderly Network aims to improve and solve the problem of fragmented liquidity.
With its robust trading system and liquidity layer, it not only supports the continued development of the ETH ecosystem, but also extends its benefits to other blockchains. Orderly functions as an omnichain trading and transaction platform, facilitating seamless transactions across various blockchain networks.
Versatile solutions for enhanced trading across all platforms
Orderly Network supports various use cases by offering a permissionless liquidity layer for Web3 trading. Wallets and custodians can leverage the network to provide users with optimal swap rates for major assets and create custom swap widgets. Sophisticated trading desks and traders benefit from Orderly’s API, which provides a centralized exchange-level experience with low-latency order execution.
Spot aggregators can leverage Orderly’s vast liquidity to obtain market-leading rates, generate volume and earn trading fees. Perpetual aggregators can access the shared order book and liquidity to develop integrated front ends to the perpetual ecosystem.
Orderly Network deploys its omnichain vaults across major chains. Source: Ordered Network
Games and decentralized applications (dApps) can improve user experience by integrating Orderly’s in-game widget for seamless token exchanges. Trading robots can access the highest and perpetual rates with features like stop-loss and limit orders, gas-free trades, and customizable fees.
Additionally, Orderly provides comprehensive hedging tools that help protect positions on other exchanges with its extensive order book, ensuring effective risk management strategies.
Driving Growth and Expanding the DeFi Landscape
Orderly Network achieved significant milestones, including surpassing $50 billion in cumulative trading volume and seeing a 100% increase in total value locked (TVL) to $40 million in just one month. The network has deployed vaults in six major blockchain ecosystems: Near, Polygon, Arbitrum, Optimism, Base and Mantle. It has also expanded its infrastructure to include the Ethereum mainnet, simplifying deposits and withdrawals between Ethereum and other supported chains. With support for over 14 DEXes, Orderly ranks in the top five on DeFiLlama’s lists.
Orderly Network has seen consecutive quarterly increases in cumulative transaction volume and number of users. Source: Ordered Network
Highlighting the importance of liquidity in the dynamic DeFi landscape, Ran Li, co-founder of Orderly Network, said: “As pioneers of omnichain, we provide various users with liquidity support and settlement for any asset, any chain or any interface. We are excited to see how this next phase plays out and continue to push the boundaries of DeFi trading together.
Innovating with the Omnichain SDK and future developments
Orderly introduced its Omnichain SDK, designed to streamline the development of perpetual protocols and advanced trading tools for EVM developers. This toolkit, operating as a plug-and-play system, allows developers to quickly create perpetual DEXs based on a backlog, significantly reducing the development time and effort of Web3 teams.
In preparation for its symbolic launch, Orderly Network has launched “The Road to the Order” campaign, a gamified initiative that rewards active traders with “merits” for each trade. These merits will contribute their share of the next airdrop after the token generation event. The campaign, currently in its 11th year, has already engaged over 57,000 weekly active traders, who can track their progress and rewards via a dedicated webpage.
Orderly Network’s roadmap contains ambitious goals for the second half of 2024. Source: Orderly Network
Looking ahead, Orderly Network plans to improve its platform capabilities and user experience in the second half of 2024 with initiatives such as the introduction of isolated margins to improve risk management and trading flexibility. This feature will allow traders to assign specific amounts of margin to individual positions, thereby limiting potential losses. Another important addition is the multi-collateral feature, which will increase the versatility of the platform by allowing investors to use various assets as collateral for their positions.
Ordered network also plans to integrate on-chain oracles to provide continuous, transparent and diverse data sources for pricing, improving the reliability and security of the platform. As Orderly continues to grow and introduce new features, it aims to set new standards for liquidity and risk management in DeFi, facilitating smoother and more efficient trading experiences.
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