Lime is an active hook manager which allows fillers or market makers to set price and fill Intent / RFQ based swap requests. This system is intended to be used through UniswapX, 1inch, CowSwap, and other RFQ / Intent based systems.
Offchain entities are usually more competitive in terms of pricing and taking orders as they can collect more information and more nimble. On the other hand, Onchain liquidity is vulnerable to toxic flows, or MEV exploits which is usually arbitrage between onchain <> offchain price (e,g. Binance and Uniswap). This situation is called LVR (Loss versus rebalance) or adverse selection problem. You can learn more on LVR intro by a16z
Lime allows onchain liquidity to be lend out to fillers or market makers, and they can set a competitive price vs offchain entities, and settle swaps with that funds. All related parties will benefit from this mechanims
- Onchain LPs will no longer suffer from toxic liquidity, arbitrageurs, MEV
- Traders will benefit from increased liquidity from onchain/offchain
- Market makers can easily access to capital
Not only Lime bridges offchain and onchain environments, but mix advantages of both worlds;
- From offchain: better pricing and execution
- From onchain: trust-minimalized control over liquidity and composability of deposit token.
This project's code bases are inspired from Stoploss hooks and Take proft hooks
- It is usually CEX who offer higher price than DEX in uptrend market
- For example, DEX offers $1500 and CEX offers $1600
- Market maker on Lime react to the market condition and offer around $1600
- By this way, liquidity providers of Lime can prevent arbitrageurs(MEV) to take all the profits, which is generated by selling an asset by about $100 higher price
- It is usually CEX who offer lower price than DEX in downtrend market
- For example, DEX offers $1500 and CEX offers $1400
- Market maker on Lime react to the market condition and offer around $1400
- By this way, liquidity providers of Lime can prevent taking unfavorable selling orders at higher price
requires foundry
forge test --via-ir