Significant capital inflow has entered the crypto space in recent years, though intense competition for liquidity has left the market fragmented, with full access to the range of digital assets available a persistent issue.
As a result, users have been forced to trust large dominant exchanges with their funds to access the liquidity and trading pairs desired, leaving them vulnerable to hacks and counterparty risk. On the other hand, defi has emerged, providing alternative decentralized exchange solutions to access crypto markets while retaining custody, though lacking the liquidity, trading pairs, and user experience of their centralized rivals.
Attempts to aggregate this fragmented liquidity have been made on both centralized (CEX) and decentralized (DEX) fronts. CEX aggregators like Tagomi deliver greater convenience and multi-chain market accessibility by pooling centralized exchange liquidity without requiring multiple accounts. However, they lack the interoperability potential of defi and still leave users vulnerable to the same custodial hacking and counterparty risks. DEX aggregators like 1inch have also grown in popularity, helping to alleviate some of the liquidity problems with the benefit of defi interoperability. However, they don’t provide multi-chain accessibility being predominantly ERC20-based, and struggle to compete on trading volumes and slippage. Swapping protocols are another popular alternative, though often not large enough to scale with demand, opening them up to manipulation.
Built on the most advanced liquidity aggregator ever developed, Orion Protocol’s hybrid solution solves some of the largest issues in defi by aggregating the liquidity of the entire crypto market into one decentralized platform. It has enabled the development of Orion Terminal and other defi products for both consumers and businesses in the space.
A Decentralized Consumer Gateway to CEX and DEX Liquidity
Orion’s flagship consumer product, Orion Terminal, is the first decentralized gateway to Orion Protocol’s hybrid cryptocurrency exchange aggregator, having launched in December. Orion Terminal seeks to complete rather than compete with existing services, delivering a mutually beneficial point of access that can aggregate the liquidity, order books, and trading pairs of every major CEX, DEX, and swap pool into one decentralized trading terminal. It offers more than just ERC20 tokens, with the flexibility to facilitate cross-chain trading in the future.
Its Order Matching Engine, familiar interface, and advanced set of trading tools connect to hundreds of top CEX and DEX platforms with over 10,000 token pairs, allowing users to connect and trade directly from their wallets without giving up private key control, data, or custody of assets. Orion Terminal guarantees efficient and scalable order fulfillment and arbitrage opportunities by aggregating the order books without needing to navigate KYC processes or manage multiple exchange accounts.
It works by combining Orion’s Liquidity Aggregator Protocol with a decentralized network of Brokers to deliver non-custodial order execution and settlement while accessing greater liquidity from major exchanges to provide the best prices, lowest spreads, and minimal slippage. This unique decentralized brokerage is made possible via a “Delegated Proof of Broker” (DPoB) governance mechanism, utilizing the Orion Protocol native token, ORN.
The network of brokers use their own verified exchange accounts while running the Orion Broker Software to automatically execute trades from the Liquidity Aggregator governed by Orion Protocol smart contracts and ORN Staking. Brokers must stake ORN to participate and earn ORN rewards from trading fees for executing those orders. Non-Broker Stakers can vote to delegate to Brokers based on the shared benefits on offer, receive discounts on Orion Terminal trading fees, and gain access to advanced features. This non-inflationary staking makes DPoB incredibly efficient and scalable, and is in addition to Orion’s ongoing Liquidity Mining opportunities and pre-staking initiative that ran before the mainnet launch.
This is just the first phase for Orion Terminal, with additional features including lending, margin trading, leveraged ETFs, derivatives, NFTs, and staking of other asset types planned on the roadmap. Next up, Orion Lending will aggregate lending APRs from centralized and decentralized providers to ensure borrowers and lenders can access the best rates. Orion Margin will then enable the creation of previously hindered margin opportunities on DEX platforms, by aggregating the liquidity and depth of centralized exchanges through decentralized executions.
Decentralized and Sustainable Enterprise Ecosystems
Orion Enterprise also provides much-needed solutions for businesses in the space. Orion has set out plans for several enterprise products including oracles, a DEX launch kit, a liquidity boost plugin for exchanges, and an enterprise trade widget for crypto projects with non-crypto clients. These will help businesses build decentralized and sustainable ecosystems, providing the liquidity, accessibility, and growth they need to succeed.
The Orion Price Oracle will provide a manipulation-resilient oracle solution due to price derivation from every order book on the market, vital to external defi products in avoiding exploits through inefficiencies in price oracles.
The Orion DEX Kit will allow blockchains to build their own cost-effective DEX, specific to their chain in a matter of hours, with a Liquidity Boost Plugin to connect to any centralized or decentralized market source to improve order book depth and liquidity.
The Orion Enterprise Trade Widget will also provide an efficient way to serve non-crypto clients and eliminate the barrier between tokens and the client. It automates direct token purchases through routing orders to immediately pay or provide credit for services, without clients having to handle the token itself.
In addition to generating network fees for Stakers and Brokers, licensing fees from these enterprise products are also shared back with the respective Brokers in ORN tokens, helping to further incentivize participants and ensure the sustainability of the ecosystem.
Solving Liquidity, Accessibility, Custody, and Scalability
Every solution built on the Orion Protocol addresses the issues of liquidity, custody, accessibility, and scalability via one platform.
Accessing the crypto market shouldn’t be difficult, and fragmentation shouldn’t discourage adoption. Decentralized finance won’t succeed by completely separating itself from centralized platforms, but by finding a way to collaborate with them to deliver hybrid decentralized non-custodial solutions that benefit from the liquidity and scalability they offer.
Orion Protocol is the leading project to be doing exactly that, effectively delegating interaction with centralized platforms to brokerage businesses. Brokers who are happy to trade off the associated risks against the built-in incentive mechanisms and provide users with decentralized access to the advantages of both cefi and defi worlds as a result.