We’re excited to announce IDEX v3 Hybrid Liquidity (IDEX HL),

the next generation of DEX that combines an order book and trading engine with liquidity pools of an automated market maker (AMM). This novel 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. IDEX HL generates higher returns for liquidity providers while also allowing for more advanced trades like stop-loss and limit orders.

Successes and Failures of AMMs

AMM DEXs have grown dramatically in popularity over the past year and are now the dominant form of DEX trading. The key innovation for AMMs is the use of liquidity pools. Active market making is replaced by pricing curves that guarantee liquidity is always available. In addition, these curves make it possible for anyone to become a market maker. This democratization of market making, in conjunction with liquidity mining, has opened the floodgates of idle capital and spawned some of the most liquid trading markets in crypto.

In spite of their success, there are still a number of complaints about these platforms.

Failed trades: transaction failures lead to a loss of gas fees; to add insult to injury, the user must try again to execute the trade, often at a worse price.

High Slippage: Front running and sandwich attacks lead to worse prices for users.

Gas wars: competing to execute trades, in particular during times of high volatility or IDOs, reduces profitability and creates an unfair trading environment.

Limited control: a lack of advanced order types leave users with two options, ape in or ape out.

The growth of AMMs has been incredible, but at the same time orderbooks are clearly not going away. The dynamic between these two exchange designs has led to some drawn out twitter debates, and, naturally, everyone is trying to figure out how these products work together. Well we’re here today to tell you that we’ve figured it out.

IDEX Hybrid Liquidity - The Ultimate Decentralized Exchange

IDEX Hybrid Liquidity (HL) is the pinnacle of DEX design, a combination of the best features of both orderbook and AMM DEXs. With liquidity pools as the foundation, IDEX HL will provide all of the same benefits that have made AMMs so popular to date. IDEX HL pushes the boundaries of what’s possible by fusing pools with a high-performance trading engine and traditional orderbook, addressing the shortcomings of other AMMs while also creating a supercharged orderbook.

How Does it Work?

This combination of AMM + Orderbook + Trading Engine will empower users to interact with liquidity pools in a totally new way. IDEX’s advanced mapping system quantizes the AMM curve into discrete orders that sit on the book alongside traditional limit orders. When a new order is submitted, the trading engine automatically matches against the best combination of limit orders and pooled liquidity for the lowest-cost execution. Traders can interact with IDEX HL through both a swap UI and a traditional orderbook interface.

IDEX HL will be the most powerful exchange platform in the market, bringing together the best elements of existing products and providing something new for everyone.

For Traders:

Instant trade execution: IDEX’s fair matching eliminates front-running and trade failures. Users get the best price and save money on gas, while liquidity pool arbitrageurs can avoid costly gas wars. Say goodbye to MEV!

Best prices: IDEX’s high-performance trading engine executes orders across all liquidity sources in real-time

Advanced order types: Trade against a liquidity pool like never before, with order types such as stop-loss, post-only, and fill-or-kill.

For Liquidity Providers:

Complete Freedom: Casual users can deposit and forget it using liquidity pools, while more sophisticated market makers can place limit orders through an industry leading API. Other AMMs have tried to support both pool and limit orders but fundamentally fall short.

This is not a support room! IDEX staff will never message you asking for your private key or any information. For assistance, please use the live help on the website.