Decentralized contract trading platform Orbits shares liquidity market-making profits with users

April 12 01:25 2023

Since the giants represented by FTX in the crypto industry have experienced frequent thunderstorms in 2022, the decentralization and transparency of the crypto trading market have attracted more and more attention. Traders are aware of the disadvantages of traditional centralized trading platforms, and the migration of trading activities from CeFi to DeFi is not a question of “if”, but a question of “when”.

In addition to security, the liquidity incentive mechanism of the decentralized trading platform also allows individual users to experience the benefits of “opening an exchange”. Up to now, in addition to DEX, the advantageous businesses of CEX, such as derivatives trading and contracts, have gradually been eroded, and the decentralized contract trading platform has also entered a period of rapid explosion. It brings users a way to earn income outside of transactions.

Next, we will introduce Orbits, a decentralized trading platform with extremely competitive advantages in technology and products, which has achieved a good balance between cost, efficiency, decentralization and security, and is also innovatively enabling users to participate in liquidity market making, share the liquidity income and transaction fees of market makers on the platform.

Orbits: a decentralized exchange based on ZK-SNARK technology

Orbits is a multi-chain order book decentralized spot and contract exchange based on ZK-SNARK technology, which realizes users’ decentralized transactions with faster, safer and cheaper features. Orbits supports liquidity aggregation and strategic trading in the process of spot and perpetual contract transactions, and shares transaction fees and liquidity benefits with users.

Orbits is based on Ethereum’s second-layer technology ZK-SNARK, which greatly reduces transaction costs and optimizes transaction efficiency while ensuring security and efficiency. At the same time, Orbits is the first DEX that supports strategic trading on the L2 chain, helping users obtain more benefits through active trading strategies.

Orbits product advantages

It seems that the team understands the psychology of trading users very well. It reproduces a silky trading experience in the decentralized world, and provides deep contract aggregation, liquidity supplementation and active trading strategies.

a. Experience the order thin DEX comparable to DEX

Orbits trading adopts the order book mode, spot trading and perpetual contracts, and supports market price and limit price trading at the same time. The user’s experience is the same as that of a CEX. Market makers earn profits through quantitative strategies, and the formulation of market-making strategies is flexible and independent. Different from the AMM model DEX, Orbits market maker has no impermanent loss. Orbits perpetual contracts support up to 20 times leverage.

b. Depth Aggregator

The Orbits aggregator aggregates the liquidity of Orbits, Binance and other platforms to achieve the best price transaction. The aggregator is a major feature of Orbits, which fills the gap in the contract trading aggregation DEX market.

c. Support multiple chains

Orbits is a multi-chain order book decentralized spot and contract exchange based on ZK-SNARK technology. It realizes multi-chain transactions, satisfies the transaction interoperability of users on different chains, and improves the efficiency of capital flow.

Liquid market making + fee sharing, bringing massive benefits to users

The exchange has always been at the top of the food chain in the cryptocurrency industry. The contract has always been the most profitable business of the exchange, and its income mainly includes transaction fees and high gambling income. By observing the profit ratios of traders in history, in most cases, traders are losers, and dealers are winners. When liquidation occurs, most of the assets lost by users are earned by exchanges and market makers that provide liquidity.

Orbits aims to break the status quo of large funds monopolizing contract revenue, and distribute the fee and liquidity market-making revenue, that is, the transaction and betting revenue with users.

a. High frequency trading income

Orbits will work with users who contribute to the liquidity market-making agreement system to realize automatic high-frequency order placement on the platform through the high-frequency trading interface. While providing users with sufficient trading liquidity, the user’s order is executed, which provides the platform with considerable fee income. It also means that the investing users of the platform become market makers, and everyone can enjoy high profits like Binance’s market makers, and the losses of other users are the profits of each “small market maker”. Every user who participates in the investment can see the order status every minute and every hour and the profit and loss of each transaction in the high-frequency account on the dex. The income of all high-frequency liquidity market making will be summarized and distributed to the investment every day.

b. Profit from Active Trading Strategies

Different from other contract DEXs, in addition to placing orders through high-frequency APIs to earn profits from liquidity market making, the orbits platform and funded users work together to earn excess returns through active trading strategies. For example, the existing grid strategy, which can help users automatically buy low and sell high within a certain range of price fluctuations according to the set grid interval.

Orbits also supports trend trading strategies, enabling users to maximize strategic benefits. By setting the buying price, triggering selling price and the maximum retracement rate to ensure the maximized capture of market trend returns. The trend trading cooperation platform provides trading signal indicators based on the monitoring of the capital flow of mainstream centralized exchanges and decentralized contract exchanges, so as to better realize short-term and mid-term profits. The benefits brought by active trading strategies are also allocated to users.

c. Order hedging income

In addition to providing instant liquidity itself, Orbits will also hedge with leading centralized contract exchanges such as Binance in a timely manner to ensure that users’ market orders can be quickly executed. While the platform provides normal liquidity for user transactions, if the real-time transaction price of orbits and binance exceeds 10 USDT, the API robot can directly and automatically place orders and hedge against binance in time, so that the price will return, and the platform will also obtain hedging income.

d. Platform fee subsidy

In addition to the market-making income, Orbits also generously shared the platform’s transaction fee income. Orbits will put 70% of the transaction fee into the reward pool and share it with the liquidity provider.

The transaction rate for spot transactions on the Orbits platform is 0.1%, and the transaction rate for perpetual contract transactions is 0.05% (consider this as an initial benefit for users, fees might be increased to cover operation expense). Assuming that the daily transaction volume on Orbits is 200 million US dollars, there will be 84,000 US dollars of subsidy income per day.

Users can expect high profits

The profits of exchanges and market makers are huge. When the market is relatively stable, the amount of liquidation in 24 hours is about 200 million U.S. dollars. When the market fluctuates violently, the liquidation amount even reaches more than 1 billion U.S. dollars. The cryptocurrency exchange Coinbase had a net profit of US$771.5 million in the first quarter, with a daily average of US$8.572 million. Binance, the world’s largest exchange, made a profit of US$3 billion in the first quarter. Most of this is the transaction fee of the user’s spot and contract. Orbits shares the profits that originally belonged to market makers with all liquidity providers.

On the whole, users can obtain subsidy rewards for transaction fees on the entire platform; capital users can use the platform’s high-frequency liquidity market-making API and active strategy trading tool to obtain market-making benefits and hedging and arbitrage benefits among the platforms. In the future, you will also have the opportunity to obtain incentives for orbits platform governance tokens and low-priced token subscription rights for the launchpad IDO of new projects in the future. 

Through the above mechanism, Orbits allows every user to experience the pleasure of earning as a market maker.

Comparison with similar products

Compared with DYDX and GMX, the two leading projects of decentralized derivatives trading, Orbits also has its own unique advantages.

The disadvantage of GMX is that GMX uses the oracle to detect the transaction price, but the liquidity provider still passively accepts the transaction. The liquidity provider cannot decide its own market-making strategy, and can only earn a small amount of transaction fees and borrowing fees.

When the market is extreme and rises (or falls) sharply, there will be a large number of open long orders (or short orders) in GMX. In such a case, the liquidity provider, as the counterparty, is actually on the short side (or long side). Therefore, there will be a corresponding loss, which is similar to the impermanent loss in ordinary AMM. GMX’s solution to improve this problem is to charge both long and short parties with borrowing fees, and the borrowing fees are charged on an hourly basis, which increases the transaction costs for perpetual contract traders.

Orbits supports active market making strategies and thus avoids this problem. More importantly, in the Orbits order book DEX, in addition to the liquidity market-making income of passive trading, Orbits can trade through active strategies such as grids and trends to earn more profit from price differences in currency price fluctuations, and has more initiative and higher profit margins that can be shared with users.

Orbits support more trading pairs. And it has better transaction depth and lower transaction fee rate, which can attract more traders to participate. More traders participating will bring better liquidity and income to the platform, and correspondingly more benefits can be provided to investing users. This is a spiraling process.

The development of Orbits

Since its launch in September 2022, Orbits has indeed received widespread attention from the crypto community, and has reached cooperation with multiple KOLs and well-known projects in the crypto field. There are English/Korean/Japanese/Indonesian/Chinese fan groups, with 30,000+ followers on social media platforms such as Twitter, and it is still expanding. Orbits global tour activities have also landed in Romania, the Philippines, Vietnam, France, and other countries.

At present, the technical framework of Orbits has been verified, the testnet has been launched, and the functions of decentralized spot and contract trading have been realized, and the trading competition will be launched soon. Compared with other products on the same track, although Orbits was launched later, due to its product functional advantages and the “profit-making strategy” of sharing fees and market-making revenues, it is still hopeful that it will be latecomers to seize the market scale and bring users to earn more.


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