⛏️Introduction to LODE
Last updated
Last updated
In recent years, it has become clear why over 95% of perpetual trading volume occurs on centralized exchanges (CEXs). Current decentralized exchanges (DEXs) rely on outdated mechanisms and architectures plagued by poor liquidity, limited trading pairs, high fees, and capital inefficiency. This misalignment between traders and DEXs creates a losing battle: venues need liquidity providers (LPs), and LPs profit when traders lose. Essentially, traders are playing against the house — and unless the house wins, it cannot survive. This system provides little incentive for DEXs to empower traders, resulting in a frustrating user experience that directly impacts profitability.
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 to explore vast, untapped markets and unearth unseen opportunities in the expansive trenches of crypto.
Unlike traditional DEXs, LODE leverages an intents-based model that doesn’t require local liquidity or LPs to list trading pairs. Instead, LODE taps into a “solver” network via SYMMIO, accessing infinite liquidity sources from any on- or off-chain venue. This enables LODE to offer an extensive array of trading pairs (300+) and deep liquidity without the limitations of conventional DEXs. For traders, this sophisticated system is seamlessly integrated into an 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 Ethereum and its Layer 2 ecosystems. As an EVM-identical Layer 1 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 incentivizing validators for a larger share of rewards, benefiting ecosystem participants. This alignment among users, dApps, and validators creates a unique, self-reinforcing flywheel that is not observed on Ethereum’s Layer 2 solutions.
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 avenues such as CEXs, DEXs, or OTC desks — before executing the trade. This ensures the solver maintains a delta-neutral position concerning the collateral required for facilitating the trade. Coined by SYMMIO, this system is known as an “Automated Market for Quotes” (AMFQ).
Key advantages of the AMFQ system include just-in-time liquidity and solvers’ ability to dynamically hedge positions in real time. This approach fosters deep liquidity and supports an extensive array of trading pairs (primarily dependent on solvers’ ability to hedge the desired asset). Moreover, it 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 decentralized perpetual trading, refer to this article by Squigs via IntentX Research.
LODE is set 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.Why LODE?
