IDEX’s ‘hybrid liquidity pool’ aims to tackle some of DeFi’s biggest problems

IDEX, a San Francisco-based decentralized alternate, has unveiled new protocol upgrades designed to remedy two of the biggest points with DeFi — slippage and front-running. 

The alternate claims that its Hybrid Liquidity protocol solves these challenges by combining an order guide and buying and selling engine with the liquidity swimming pools of an automatic market maker, or AMM.

“The novel exchange design protects users from the most glaring pitfalls of AMMs, including failed trades and front-running, by instantly executing trades against the best combination of limit orders and pooled liquidity,” the corporate said, including:

“This approach generates higher returns for liquidity providers while also allowing for more advanced trades like stop-loss and limit orders.”

IDEX cites analysis from Dune Analytics displaying that up to 5% of transactions on Ethereum-based decentralized exchanges fail due to problems like “too much slippage or insufficient gas prices.” Data from Etherscan and Dune Analytics also present that roughly 22% of Uniswap transactions between Apr. 15-21 failed.

Uniswap is the second-largest decentralized alternate by buying and selling quantity, according to Coingecko. Mdex takes the highest spot, primarily based on 24-hour transactions as of Thursday.

DeFi, which stands for decentralized finance, is one of the biggest trends in the cryptocurrency market, however the business’s speedy development over the previous 12 months hasn’t come with out problems. Exorbitant prices, good contract dangers and the upper probability of consumer error are simply some of the biggest pain-points dragging on adoption. Security can be a difficulty, as evidenced by the theft and exploitation of a whole bunch of tens of millions of {dollars} value of DeFi property.

Nevertheless, DeFi stays on monitor to develop significantly through the subsequent leg of the bull market. Currently, greater than $137 billion has been locked into the ecosystem, according to business information.