Liquorice in short

This page gives a quick overview of the value that Liuquorice brings in DeFi sapce

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 market where liquidity provides (LPs) have an opportunity to stake their capital on per asset basis and earn returns based on 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 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 time they hold debt. PMMs are very flexible 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 and same for their private inventory which they can use as collateral or put in the lending pool to earn interest along the LPs. No matter what the PMMs decide, smart contract always checks that there will be enough collateral in the lending pool to ensure that LPs funds are secured before approving token transfers. The interest rate model implemented in Liquorice has a novel design as it uses funding rates dynamic as a core parameter to define borrowing costs which helps PMMs maintain their startegies in the long term. As one of the core features, we enable PMMs to hold a portion of their capital buffer on a single chain while borrowing on multiple EVM supported blockchains and not 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 with such a transaction.

  • Single point of access to core meta aggregators: by integrating wiht Liquorice, PMMs gain unified and simplified access to all core meta aggregators such as 1inch and Uniswap X. Liquorice team partners up with multiple solvers in DeFi ecosystem and maintains the required offchain and onchain infrastructure to act as an intermediary between solvers and PMMs.

Last updated