Liquidity Layers
Lex operates on a prioritized multi-layered liquidity framework to maximize efficiency and scalability.
Layer 1: Coincidence of Wants (USP)
Coincidence of wants leverages natural liquidity movements between chains.
Example:
Scenario: A solver operating on Polygon and Solana has $170,000 on Solana and $30,000 on Polygon. A market maker has excess liquidity on Polygon and needs liquidity on Solana.
Solution: Lex matches these liquidity needs, enabling direct on-chain transfers without bridging, utilizing Solana’s SVM for low-latency execution.
This layer handles simple and complex matching scenarios, including multi-asset swaps and multi-party transactions.
Layer 2: Micro Liquidity Pools (USP)
Micro liquidity pools provide dynamically rebalanced liquidity across chains.
Capital Efficiency: Pools are highly optimized, focusing on stablecoins and native chain assets (e.g., SOL, ETH, MATIC).
Automated Rebalancing: Lex manages pool rebalancing periodically, ensuring high liquidity utilization and minimal latency.
Use Case: A solver supplies liquidity on one chain and accesses the same amount on another chain in seconds to fulfil an intent.
Layer 3: External Solvers (Open Market)
Lex integrates with existing solver networks and protocols to provide additional liquidity options.
Auction Mechanism: Intent auctions allow external solvers to bid, ensuring optimal liquidity and output.
Collaboration: Enables external solvers, bridges, and intent protocols to participate without relying on Lex’s native pools.
Layer 4: Compass Integration (Backup)
Compass, the flagship product of Blockend, acts as a liquidity aggregator.
Aggregated Liquidity: Sources liquidity from DEXs, bridges, RFQ providers, and intent protocols.
Fallback Mechanism: If internal layers cannot fulfill an intent, Compass ensures execution through its broad liquidity network.
Workflow
Intent Submission: A user or protocol submits a cross-chain liquidity intent.
Auction Process: Lex’s SVM layer initiates an auction across its four liquidity layers.
Execution: The most efficient liquidity source is selected, ensuring optimal output and speed.
Rebalancing: Post-transaction, Lex rebalances liquidity across chains to maintain efficiency.
Settlement: Settlement data from multiple transactions is efficiently compressed and securely posted to the Solana Mainnet, ensuring transparency and composability.
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