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

  1. Intent Submission: A user or protocol submits a cross-chain liquidity intent.

  2. Auction Process: Lex’s SVM layer initiates an auction across its four liquidity layers.

  3. Execution: The most efficient liquidity source is selected, ensuring optimal output and speed.

  4. Rebalancing: Post-transaction, Lex rebalances liquidity across chains to maintain efficiency.

  5. Settlement: Settlement data from multiple transactions is efficiently compressed and securely posted to the Solana Mainnet, ensuring transparency and composability.

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