IDEX Unveils Hybrid Liquidity Pools to Solve DeFi’s Slippage & Front-Running Dilemmas

IDEX Hybrid Liquidity Fuses Core Elements of Order Books and AMMs

Chicago, Illinois, UNITED STATES

San Francisco, May 06, 2021 (GLOBE NEWSWIRE) -- IDEX, a high-performance decentralized cryptocurrency exchange (DEX), today announced IDEX Hybrid Liquidity (IDEX HL), an innovation that combines an order book and trading engine with liquidity pools of an automated market maker (AMM). The novel exchange design protects users from the most glaring pitfalls 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.

Few challenges plague the DEX ecosystem like 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 failing -- 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.

DeFi’s struggles come to a head as an influx of mainstream interest enters the space. Recently, it was discovered that 12.6% of billionaire investor Mark Cuban’s Ethereum transactions had failed, despite spending nearly $12,000 USD on gas fees alone.

“Despite the shortcomings limiting the scalability of the DeFi ecosystem, little has been done to mitigate front-running, sandwich attacks, and trade failures,” said Alex Wearn, CEO of IDEX. “With IDEX Hybrid Liquidity, we’ve finally eliminated these issues that have persisted in the DEX landscape.”

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 liquidity pool is integrated with IDEX’s high-performance trading engine which allows for fair, real-time trade execution. This design not only eliminates issues like front-running and trade failures, but 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,” continued Wearn. “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.”

This news comes on the heels of IDEX’s February launch of IDEX’s trading infrastructure on Binance Smart Chain to provide efficient, cost-effective 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.

For more information about the new Hybrid Liquidity product, visit the IDEX blog.

About IDEX

IDEX is the world’s most advanced cryptocurrency exchange. Combining the speed and features of a centralized exchange with the security of a DEX, IDEX is the only cryptocurrency exchange that does not compromise performance or security. The new exchange makes it easier than ever for market makers to integrate with their existing infrastructure and provide deep liquidity in a secure manner. IDEX is a product developed by Aurora Labs, S.A.


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