Centralized exchanges have presented clear problems for the cryptocurrency industry, from security breaches to high fees and slow transaction times. Decentralized exchanges (DEX) have emerged as an alternative, but they too have faced challenges such as low liquidity and complex user interfaces. This disorderly situation is what inspired Ran Yi and his team to create Orderly, a next-generation exchange that combines the best features of both centralized and decentralized platforms.
—
Background on Orderly
With a background in TradFi, Ran Yi was known for being proficient on the derivatives trading desk during the financial crisis of 2008. This first hand experience of witnessing the flaws of centralized systems is what motivated him to explore the potential of decentralized solutions. He eventually found himself immersed in the world of cryptocurrency and blockchain technology, and saw the potential for creating a more efficient and secure exchange platform.
“Financial markets are fragile and it gave me a shock at to what could possibly happen.”
Ran Yi, Co-Founder of Orderly
As the conversation continued, Ran Yi gave a brief overview of how the financial crisis of 2008 impacted him and how it compares to illiquid leveraged assets in the crypto space like the Luna protocol. It was clear that he had a deep understanding of the issues and challenges faced by both traditional financial systems and the rapidly evolving crypto industry.
Ran Yi kept going deeper and deeper into the world of crypto, learning about decentralized exchanges and their potential to revolutionize the way we trade. However, he also noticed that most DEXs lacked user-friendly interfaces and suffered from low liquidity due to fragmentation in trading pairs.
“Now, liquidity is fragmented, it shouldn’t be, it should be one unified liquidity.”
Ran Yi, Co-Founder of Orderly
With several successful endeavors in the crypto industry already under his belt, Ran Yi decided to take on the challenge of creating a next-generation exchange that would combine the best features of both centralized and decentralized platforms.
The Different Stakeholders In The Ecosystem Explained
The end goal and vision for Orderly is to let anyone trade anything from anywhere. In order for this vision to become a reality, it is crucial to understand the different stakeholders in the ecosystem and how they interact with each other.
With seven different chains already in the ecosystem (and an eighth expected to integrate by the end of the month), each chain serves as a stakeholder in the Orderly ecosystem. Optimism, Arbitrum, Polygon, Base, Mantle and Solana are just a few of the chains that are currently part of Orderly. Each chain has its own unique features and strengths, making them valuable contributors to the ecosystem.
“We are one shared orderbook between blockchains.”
Ran Yi, Co-Founder of Orderly
In addition to chains, Ran talks about the market makers as another important stakeholder in the ecosystem. These are individuals or firms that provide liquidity to the exchange by continuously buying and selling assets on both sides of a trading pair. By having market makers involved, Orderly can ensure sufficient liquidity for traders to buy and sell assets at any time.
The duo approach of both active and passive liquidity, from professional market makers and retail. By pooling these two types of liquidity, Orderly can maximize the benefits for traders. Vaults where users can deposit liquidity and market makers to withdraw from are in the works and are expected to be available in just a few short weeks.
How Orderly Fits Into The Broader Ecosystem
After understanding the stakeholders within the Orderly ecosystem, Ran Yi made sure to emphasize how Orderly fits into the broader blockchain ecosystem. The current state of decentralized exchanges is still fragmented, with different protocols and blockchains operating independently from one another. This is important to understand how Orderly fits into the broader ecosystem of decentralized finance (DeFi).
Described as an orderbook lego for various DeFi protocols, Orderly provides the bridging mechanism between different chains and protocols. By offering a shared orderbook platform for these disparate systems, Orderly enables interoperability and increased liquidity across all DeFi platforms. This allows for seamless trading and asset exchange between different protocols, regardless of the underlying blockchain technology.
“I firmly believe that the financial system should be on-chain.”
Ran Yi, Co-Founder of Orderly
Wallets, Telegram bots, and perpetual aggregators are just a few of the products that can integrate with Orderly. This opens up a world of possibilities for users, allowing them to access multiple DeFi protocols and assets all in one place. With Orderly acting as the intermediary between different platforms, traders can avoid the hassle of switching between different interfaces and can make trades with ease.
With the vision of having DEXs being easily created and ready to serve their communities, Orderly’s team is committed to building a more connected and efficient decentralized finance ecosystem. By empowering community leaders to start their own branded DEX on the Orderly platform, Orderly aims to democratize access to decentralized finance and make it accessible to everyone.
How Market Cycles Can Impact Decentralized Exchanges
For anyone that has been in the crypto space long enough, they are familiar with the concept of market cycles. These are the periodic fluctuations in price and sentiment that occur in the cryptocurrency market. Market cycles can have a significant impact on decentralized exchanges, and understanding how they work is crucial for traders and platform operators alike.
Ran Yi is overall quite bullish on the outlook of the broader crypto markets, presenting an overly optimistic outlook for the near future. With the federal reserve cutting interest rates recently, it’s possible that the outlook presented by Ran Yi is in fact an accurate one. However, from an asset class size perspective, crypto is still quite small when compared to commodities or equities.
The Bitcoin ETFs entering the market is a key event that can impact the price of BTC and thus the entire cryptocurrency market. Institutional capital coming into the market through these ETFs will bring more liquidity, stability, and legitimacy to the space. This can potentially lead to a sustained uptrend in prices, which in turn can impact decentralized exchanges.
There is still room for crypto to grow substantially and Orderly is positioning itself to be at the forefront of this growth by providing a user-friendly and efficient decentralized finance ecosystem.
Final Thoughts
As the liquidity layer that connects the fragmented world of decentralized exchanges, Orderly is an essential piece in the puzzle of building a truly decentralized financial system. With its ability to bridge different protocols and blockchains, Orderly not only increases liquidity but also promotes cross-chain compatibility and interoperability. This ultimately leads to a more inclusive and accessible decentralized finance ecosystem for all users.