🥝Lime (PoC)
Introduction
Exciting news from the Orange Finance team! We recently won accolades at ETHGlobal NYC for our innovative project, Lime—an active hook manager. Lime is set to elevate on-chain liquidity to institutional-grade profitability.
More details can be found at EthGlobal.
What is Lime?
Lime is a pioneering active hook manager, empowering market makers to set prices and fulfill swap requests through Intent/RFQ. It is designed for seamless integration with platforms like UniswapX, 1inch, CowSwap, and other RFQ/Intent-based systems.
How Lime Works
Uni V4 hooks allow liquidity providers (LPs) to execute code before/after swaps, modify liquidity positions, and initialize swaps. Lime utilizes this functionality to lend on-chain liquidity to fillers/market makers, who can then set competitive prices against off-chain entities and settle swaps with these funds.
Current AMM Issue
In today's market, off-chain prices (CEX) often lead, while on-chain prices (DEX) follow. This discrepancy results in toxic order flow and losses for DEX liquidity due to arbitrage against CEX prices, exacerbated by Maximal Extractable Value (MEV).
Potential Issue Post-UniswapX
The advent of UniswapX could potentially aggravate this issue. It allows routing swap transactions to any source, possibly diverting profitable transactions to off-chain liquidity due to superior pricing capabilities.
Lime as the Solution
Lime promises several benefits to the ecosystem:
Toxic Flow and MEV Prevention: By aligning on-chain prices with off-chain observations, Lime mitigates the risks of MEV and toxic flows.
Increased Liquidity: Lime combines the best of both worlds—off-chain pricing efficiency and the trust-minimized environment of on-chain systems.
Making On-Chain Liquidity Accessible: Market makers and operators can leverage liquidity deposited into Lime, offering a cost-effective alternative to external capital sources.
Benefits for All Stakeholders
Lime's model ensures benefits for all parties involved:
On-chain LPs will be safeguarded against toxic order flow, arbitrageurs, and MEV.
Market makers gain easy access to capital.
Traders enjoy enhanced liquidity from both on-chain and off-chain sources.
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