Liquorice in short

This page provides a quick overview of the value that Liquorice brings to the DeFi space

Liquorice is a decentralized application that implements auction-based price discovery and single-sided liquidity pools. The main mission of Liquorice is to provide professional trading firms with an efficient tool to manage their inventory and simple connectivity to core DeFi protocols such as 1inch and Uniswap X when using intents to settle trades.

At the same time, Liquorice creates lending markets where liquidity providers (LPs) have the opportunity to stake their capital on a per-asset basis and earn returns based on the trading and borrowing activity flowing through the system.

Liquorice introduces the following core functionality to achieve its goals:

• Intent based lending and settlement: LPs stake capital on a per-asset basis. Connected private market makers (PMMs) use capital from the lending pools to settle trades and share rewards with the LPs based on trade notional and the time they hold debt. PMMs have flexibility as they may specify lending parameters in the signed order. They can decide how many tokens they want to receive from the trader to the collateral pool or to their wallet, as well as manage their private inventory, which they can use as collateral or place in the lending pool to earn interest alongside the LPs. Regardless of the PMMs' decisions, the smart contract always ensures that there will be enough collateral in the lending pool to secure LPs' funds before approving token transfers. The interest rate model implemented in Liquorice has a novel design, using funding rate dynamics as a core parameter to define borrowing costs, which helps PMMs maintain their strategies in the long term. As one of its core features, we enable PMMs to hold a portion of their capital buffer on a single chain while borrowing on multiple EVM-supported blockchains without violating collateralization.

• Tradable LP tokens: The LP tokens on Liquorice can be exchanged for underlying crypto or other tokens through the Liquorice RFQ system. This adds additional utility for liquidity providers while giving connected market makers an additional stream of revenue, as they can earn a fee by facilitating such transactions. PMMs also gain an easy way to repay their debt through such transactions.

• Single point of access to core meta aggregators: By integrating with Liquorice, PMMs gain unified and simplified access to all core meta aggregators such as 1inch and Uniswap X. The Liquorice team partners with multiple solvers in the DeFi ecosystem and maintains the necessary off-chain and on-chain infrastructure to act as an intermediary between solvers and PMMs.