The Berachain-based decentralized exchange and liquidity hub Kodiak Finance is adding greater sophistication to its platform with advanced order types courtesy of a partnership with Layer-3 infrastructure network Orbs.
Kodiak said it has added Orbs’ dTWAP and dLIMIT protocols to its DEX platform to enable traders to be much more specific about the way they conduct their trades and potentially increase their profitability.
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With regards to dTWAP, this gives traders the ability to break down large volume orders into many smaller ones, executing them at regular intervals. The idea with this is that it helps to reduce the price impact of massive orders, which can lead to “slippage”, where transactions are settled at a different price to what the trader had hoped for. Crypto whales and institutions will therefore be able to use Kodiak to execute much bigger trades more profitably, without drawing attention to themselves.
In addition, dTWAP can also aid in dollar-cost-averaging (DCA) strategies, allowing traders to buy a specific asset piecemeal, over a period of days, weeks or months, in order to build up a position, without being short-changed.
The dLIMIT order also helps traders to improve their profitability, but it works differently. With this, Kodiak’s traders will be able to specify a price range where they want to buy or sell a particular asset. In practice, it means making the order ahead of time, and then waiting until the price of the asset rises or falls within the range, at which time it will automatically be executed.
It means traders don’t have to settle for buying or selling at the current market rate, nor do they have to keep watching and waiting until the price of an asset moves to an acceptable point. If the asset’s price goes in the opposite direction, the trade won’t be executed, and the user can either cancel it or wait to see if the trend reverses.
Kodiak said it’s partnering with Orbs because it wants to give its users more flexibility. The new order types also allow them to factor in things like gas fees, which can change considerably depending on how busy the network is.
The partnership represents another vote of confidence in Orbs and illustrates the growing demand for the Layer-3 infrastructure it provides. Its decentralized backend services enhance the logic of traditional smart contracts, meaning that decentralized applications can support new functionalities that weren’t available before. Orbs can be thought of as a supplementary execution layer, aggregating liquidity from multiple chains and DEXs to streamline dApp transactions.
The integration of dTWAP and dLIMIT will increase the appeal of Kodiak’s platform, which has already become the most popular DEX on Berachain with more than 100,000 users and over $250 million in total value locked.
The platform takes full advantage of Berachain’s novel Proof-of-Liquidity consensus mechanism, which requires validators to provide liquidity rather than staking tokens to validate transactions. By locking funds in Berachain, users can help to process transactions and earn rewards and help to ensure there’s plenty of liquidity available for traders, enabling price stability and reduced slippage.
Why This Matters
The move brings advanced, automated trading tools to decentralized exchanges, narrowing the gap between professional trading features in traditional finance and DeFi platforms.
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People Also Ask:
Kodiak Finance is a decentralized exchange (DEX) and liquidity hub built on the Berachain blockchain, allowing users to trade crypto assets without intermediaries.
Orbs is a Layer-3 blockchain infrastructure that enhances smart contracts by adding off-chain computation and automation capabilities for decentralized applications.
These order types allow for more precise and automated execution, helping traders control costs, reduce manual monitoring, and minimize the risk of poor entry or exit prices.
Proof-of-Liquidity requires validators to provide liquidity instead of staking tokens, helping stabilize prices and ensure sufficient liquidity on the network.
Yes. The new tools allow traders to better plan around variable gas fees, making transactions more cost-efficient depending on network activity.
