What Makes HydroTrade Unique?
HydroTrade sets itself apart from existing automated market makers (AMMs) through several key innovations:
Adjustable Fee: Liquidity providers ("makers") can set specific buy and sell ranges for their tokens, allowing them to establish a custom fee/spread, rather than conforming to a uniform fee prescribed by the AMM.
Rotating Liquidity: Liquidity is automatically rotated between the maker's selected buy and sell ranges as orders are executed.
Irreversible Orders: User liquidity trades in one direction, making orders irreversible.
MEV Resistance: Spot trading is safeguarded against MEV sandwich attacks.
Adjustable Fee
Users who create strategies in HydroTrade ("makers") function similarly to liquidity providers in existing AMMs, supplying liquidity for trading and collecting fees from other users ("takers") who execute spot trades using their liquidity.
However, HydroTrade offers a distinctive advantage: each maker can customize the fee they collect from trades by setting their own buy and sell ranges. Unlike traditional AMMs, which impose a uniform fee structure on all liquidity providers, HydroTrade allows LPs to define their personalized fee (or spread) by choosing specific prices at which they want to buy and sell their tokens.
Rotating Liquidity
In traditional on-chain liquidity protocols and AMMs, users provide liquidity using a single pricing curve (or "bonding curve") that handles both buying and selling of tokens. HydroTrade takes a different approach by allowing each user position to consist of two bonding curves (or "orders"): one for buying and one for selling. When a user deposits a token pair, each token has a custom curve based on user-defined settings. Once a buy or sell order is executed at the desired price, the liquidity automatically rotates to the paired curve, and vice versa.
For single-use limit or range orders on HydroTrade, once the order is executed, the liquidity is taken "off-curve" and moved to an inactive paired order, where it remains until the user withdraws their position. In the case of a recurring strategy, buy and sell orders trade continuously, with liquidity shifting between the paired orders as trades are executed. This creates an ongoing strategy similar to "Grid Trading" or "Scalping," where the user buys within one price range and sells within a higher range until they choose to stop the strategy.
Unidirectional, Irreversible Orders
In existing concentrated liquidity protocols like Uniswap V3, executed orders can be reversed when markets retrace due to the bidirectional nature of AMM liquidity. Once a buy order for one asset is executed, a sell order for the other asset is placed at the same price. To prevent order reversal, users must manually monitor and withdraw their liquidity upon execution or rely on external tools to do so.
In contrast, HydroTrade's limit and range orders flow in a single direction, making them irreversible upon execution. This design eliminates the need for users to constantly monitor their orders and manually withdraw them in time or depend on third-party tools. Read more about HydroTrade limit orders.
MEV Protection
The irreversibility of HydroTrade orders ensures that spot trades executed against HydroTrade strategies are protected from MEV sandwich attacks.
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