Hi, everyone! The world of DEXs offers several options that compete for the organic traffic of traders. ChainFlip has a focus that differs from market standards by giving Liquidity Providers a more active role.
In this clip:
- JIT AMM and Intent-Based Swap
- Liquidity Providers have a more active role on ChainFlip
- Effective use of the available liquidity
- Offering users the best pricing
When a swap is initiated on ChainFlip, the background information of the transaction is loaded first so the LPs know it’s coming. It then becomes an open auction for the trade, where Market Makers bid to provide the best possible pricing, ensuring someone will earn that flow.
This way, there is no need for arbitragers since LPs, who are usually passive, now have an active role in pricing and trading flow beyond just providing liquidity in a V2 pool.
With this capital efficiency model, ChainFlip has been able to compete with THORChain while having a quarter of its liquidity available. To understand more about the process, check out this clip from Chain Chatter, where Simon Harman explains it in depth.