There are two types of crypto exchanges in the industry: centralized and decentralized. Both have their shortcomings: centralized exchanges are vulnerable to attack, while decentralized exchanges remain a relatively new introduction to the industry. Liquidity has always been a problem for exchanges which makes it difficult for traders to trade profitably on popular exchanges.
To solve this liquidity problem associated with exchanges, Alexey Koloskov, CEO and co-founder of Orion Protocol , launched this project in 2020 to solve some of the biggest problems in DeFi by adding the liquidity of the entire cryptocurrency market into a decentralized one. platform.
In this article, we will take a look at the Orion Protocol that promises what the cryptocurrency industry needs today.
What is the Orion Protocol?
Orion Protocol is the brainchild of Alexey Koloskov, CEO of Protocol and former chief architect and creator of the Waves decentralized exchange, who began development in 2018. In Q2 2020, the team launched the public testnet followed by the public mainnet in December 2020.
Orion Protocol is a new kind of DeFi platform that combines the best features of exchanges, brokerages and instant trading applications. The protocol aims to bridge the gap between the centralized and decentralized worlds of crypto.
The platform promises to do so by leveraging a liquidity aggregator connected to all major crypto exchanges, centralized and decentralized, and exchange groups.
With these features, the platform wants to allow merchants to get the best price for their operations from a single portal . It offers powerful portfolio management tools, security, convenience, and flexibility to provide a suitable place for seasoned traders, institutional traders, and newcomers alike.
The following words by Alexey Koloskov describe the ambitions of the Orion Protocol:
While it is clear that the future must be decentralized (after all, it is what encryption is fundamentally based on), it is impossible to ignore the prominence of centralized entities. Orion was born out of the need for an intermediate solution that bridges the gap between the centralized and decentralized worlds of cryptocurrencies. Our ambitions for Orion have always been to go beyond what was currently possible. In what we have built to date and on our roadmap we have done, having created a protocol that will change the future of DeFi for the better. "
Orion Protocol architecture
The core of Orion Protocol consists of the modular architecture of distributed and decentralized services that fulfill its entire settlement on the Ethereum platform. Most of Orion's core components are open source for the Orion Foundation.
First, the Orion Protocol standardizes an API for the different elements of your liquidity aggregator, providing a common language to connect to any exchange. Second, it creates a marketplace for DApps built on top of its protocol that can include arbitrage applications, algorithmic trading bots, mutual funds, and payment integration systems. The network of components that make up the Orion marketplace for DApps can be developed and enhanced by third parties, ensuring higher quality and availability of functionality.
The core components of the Orion Protocol
Order matching engine
The main purpose of the order comparison engine is to ensure that trades are executed at the most advantageous price by accessing the lowest offers and the highest offers on all available exchanges. When an order is received, the engine first tries to execute it in the builtin order book. If the internal order book does not provide the best prices, perform a smart search using the data provided by the Price Discovery Module to find the exchange or exchanges that offer the best price for the required quantity.
When ordering, the Orion Protocol uses specific executors for CEX and DEX to execute orders. CEX executors work with API keys where DEX executors sign orders directly from the multi-currency wallet using a private key.
CEX module
The centralized exchange executor is simply an adapter for a particular exchange that can submit Buy or Sell limit orders using the provided API key, and monitor their fulfillment.
DEX module
The DEX module is used to connect to a DEX in the same way that the order matching engine connects to a centralized exchange. But instead of using an API key, the DEX executor uses a private key provided by a multi-currency wallet
Multi-currency wallet
It is just a wallet that supports multiple cryptocurrencies alongside Orion's native ORN token. It is used to sign DEX orders for DEX executors and can be integrated into a portfolio management module to provide a trading history and calculate the cost and profit of trades.
Price discovery module
It is like a plugin that offers a live price feed of exchanges in real time. A new plugin can be easily written by creating a simple interface and presenting exchange information within it. The supply of price data is charged in ORN tokens from customers and developers receive a fee for providing that data.
Portfolio management module
This module provides a range of functions for smart portfolio management, including trading history, current balance, profit / loss, and comparison of different trading strategies.
DApp Market
A wide range of applications such as trading bots and payment gateways can be created on the protocol. The first DApp to run on the Orion protocol is Orion itself. The ORN token is widely used in DApps as a utility token , and is used to pay for all services, including commissions, and within its lending model.
The crypto index fund module and the decentralized brokerage module are also core components of the network. Read the Orion Whitepaper to learn about them.
Orion's flagship: Orion Terminal
Orion Protocol's flagship product is Orion Terminal, which aims to be the first gateway to the entire crypto market that aggregates every CEX, DEX, and exchange pool on one decentralized platform. It seamlessly adds unlimited liquidity from all major exchanges to provide rich trading tools in one easy-to-use platform.
As Crypto Economy reported , Orion Terminal Phase 1 went live on the mainnet on December 15, 2020. Phase 1 supports trading, deposit and withdrawal services. Over the next month, more features including trading pairs will be continuously added, including the ORN stake at the beginning of the first quarter. Loans, margin trading, leveraged ETFs, derivatives, contract trading, NFTs, and bets on any type of digital asset will also be added in the future.
The data added by Orion Terminal is also sent to Chainlink's pricing oracle network .
Other products
App store
This is the DApp market mentioned in the architecture section. User can purchase Orion-based applications and trade signals from independent developers in this application store.
Enterprise Commerce Widget : Allows partner companies and non-blockchain-based companies to integrate encryption operations directly into their applications and websites.
Liquidity Boost Plug-in - This plug-in enables CEX and DEX to increase liquidity in their market instantly through a custom-designed matching engine, connecting to dozens of different exchanges in real time. Exchanges can place this plugin on their platforms to contribute to Orion's added liquidity.
Blockchain DEX Kit - Provides the easiest way for users to start their own decentralized exchange with instant access to Orion liquidity.
ORN Token
$ ORN is an ERC-2 0 token that is used to perform all main activities on the platform. While other currencies will be accepted, paying with ORN will guarantee a discount on fees and other features.
Orion has tried to ensure the deep utility of its native ORN token throughout the protocol, integrating it into all major transactions to take the form of an internal coin or utility token.
According to its website, the ORN token offers sixteen streams of income and is the first token sold through the Dynamic Coin Offer (DYCO).
ORN is used for Orion Terminal, decentralized brokerage staking, non-broker staking, and App Store payments. The ORN holder will have access to premium trading features such as limit orders, stop market and stop-limit orders, in addition to controlling stop loss and take profit parameters.
Links of interest
Website: https://www.orionprotocol.io/
Whitepaper: https://www.orionprotocol.io/hubfs/whitepaper.pdf
Twitter: https://twitter.com/orion_protocol
...and you will also help the author collect more tips.
Liquidity Boost Plug-in - so only the exchanges who accepts to adopt this Plug In could become contributors to Orion Protocol? This means a lot of Negotiations to become accepted by the big players