The platform seeks to provide solutions to drawbacks on traditional DEX platforms, most notably front-running and slippages.
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IDEX, a decentralized cryptocurrency exchange (DEX) based in San Francisco, has announced the upcoming launch of its v3 Hybrid Liquidity DEX on Polygon.
The hybrid model will merge traditional order book functionalities with automated market maker (AMM) liquidity pools in a bid to cultivate higher financial returns for the services liquidity providers, as well as provide typical investing tools such as stop-losses, limit orders and real-time execution.
According to the platform, operating on the Polygon network enables lower transaction costs to the value of “10,000–100,000 times cheaper” than is typically witnessed on Ethereum layer-one, in addition to benefitting from the network’s full-stack Ethereum scaling mechanics.
— IDEX (@idexio) November 30, 2021
For greater context into the burden of high fees for liquidity providers in decentralized finance (DeFi), a research paper published by Topaz Blue and Bancor Protocol uncovered that almost half of all liquidity providers on Uniswap v3 have been subject to impermanent loss based upon a 43% data snapshot of the platform.
Despite this, the platform ranks first in DEX 24-hour trading volume at $2.8 billion, according to data from CoinGecko, closely followed by PancakeSwap v2 with $2.3 billion.
As for gas prices, many DeFi participants have been encouraged to transition over to Ethereum Virtual Machine-compatible and layer-two networks in search of cheaper alternatives, a trend that has resulted in a soaring level of market total value locked.
IDEX CEO Alex Wearn said, “DeFi has been hamstrung by issues like gas prices, front-running and slippage since its inception, yet few solutions have truly offered answers to these problems,” adding:
“The novel Hybrid Liquidity design protects users from these pain points, while simultaneously generating higher returns for liquidity providers to boost the scalability of the wider decentralized economy.”
Alongside the protocol launch, the exchange is also offering a number of incentives for users that interact with the platform. Liquidity Mining will provide 1,400,000 IDEX tokens per week to enhance liquidity, while a rewards program will acknowledge regular activity.