⛏️Introduction to LODE
Last updated
Last updated
In recent years, it’s become clear why over 95% of perp trading volume occurs on CEXs. Current DEXs rely on outdated mechanisms and architectures plagued by poor liquidity, limited pairs, high fees, and capital inefficiency. This misalignment between traders and DEXs creates a losing battle: venues need LPs, and LPs profit when traders lose. In other words, you’re playing against the house — and unless the house wins, it can’t exist. Unfortunately, this creates little incentive for DEXs to empower traders, resulting in a frustrating user experience that directly impacts your bottom line.
This is why we built LODE. LODE is not just another decentralized exchange — it’s an entryway to infinite resource troves. Designed for traders who crave freedom and opportunity, LODE empowers users that wish to explore vast untapped chasms to unearth unseen troves in the expansive trenches of crypto.
Unlike traditional DEXs, LODE uses an intents-based model that doesn’t require local liquidity or LPs to list trading pairs. Instead, LODE taps into a ‘solver’ network, accessing infinite liquidity sources from any on- or off-chain venue. This allows LODE to offer an endless array of trading pairs (280+) and deep liquidity without the constraints of conventional DEXs. For you, the user, all of this complexity is seamlessly integrated into our intuitive front end, delivering a familiar trading experience with industry-leading UI and UX.
We believe Berachain is poised to become a unique DeFi hub outside of Ethereum and its Layer 2s. As an EVM-identical L1 built on the Cosmos SDK, Berachain stands out with its innovative ‘Proof of Liquidity’ (PoL) system, which aligns validators, Dapps, and users in a truly meritocratic ecosystem — free of traditional incentive programs or bureaucracy. In this model, the best-performing Dapps and their users earn the most rewards, creating a powerful motivation to build and engage.
This dynamic fuels a virtuous cycle: as more users engage, more PoL is generated, leading to increased governance rewards (BGT) and direct incentives. Dapps actively compete by bribing validators for a larger share of rewards, benefiting ecosystem participants. This alignment between users, Dapps, and validators creates a unique, self-reinforcing flywheel that we don’t see on Ethereum’s L2s.
Once liquidity enters the Berachain ecosystem, it tends to stay. Users face negative opportunity costs if they move liquidity elsewhere, missing out on potential rewards. This ‘sticky’ liquidity creates a strong gravitational pull, positioning Berachain as a key DeFi liquidity hub.
The concept of intent-based trading, despite its growing popularity within DeFi, remains elusive to many. Originating from SYMMIO, intent-based derivatives trading facilitates a symmetrical, coordinated exchange of perpetual contracts between two parties: the trader and the solver.
In practical terms, a trader expresses their 'intent to trade' via the LODE front-end. This action triggers an instantaneous quote response, as real-time quotes are streamed continuously from solvers—sophisticated off-chain market makers. Should the trader agree to the trade's terms, they proceed by submitting a 'request for trade,' accompanied by the necessary trade collateral. Upon this request, a solver strategically hedges—potentially through a variety of avenues such as CEX, DEX, or OTC desks—before execution. This ensures they maintain a delta-neutral position concerning the collateral required for facilitating the trade. Coined by SYMMIO, this system can be defined as an 'Automated Market for Quotes' (AMFQ).
Key advantages of the AMFQ system include the provision of just-in-time liquidity and the capability for solvers to dynamically hedge positions in real-time. This not only fosters deep liquidity and an extensive array of trading pairs (primarily dependent on the solvers' ability to hedge the desired asset) but also eliminates the burden of excessive borrowing fees for users. Instead, users are subject to a nominal base fee of 0.06%, a solver-determined spread (constituting their profit margin), and funding rates designed to maintain market equilibrium.
For an in-depth exploration of intent-based derivatives within the decentralized perpetuals trading sphere, consider this article published by Squigs through IntentX Research.
LODE plans to emerge as a best-in-class derivatives DEX on Berachain, blending advanced technology with strategic partnerships to offer a compelling trading platform. With its unique approach to intent-based derivatives trading, supported by innovative structured products and a distinct user interface, LODE ensures a seamless and efficient trading experience. Our commitment to deep liquidity, low fees, and a broad spectrum of trading pairs positions LODE as an essential platform for traders seeking to navigate the complexities of the crypto market with ease and confidence.
