Carbon Aims To Bring The Next Wave Of Traders On-Chain With New Programmable DEX Liquidity Model

Bancor is launching a new on-chain trading protocol called Carbon, which makes automated on-chain trading easier and more advanced than ever before.

In a post-FTX world, decentralized exchanges (DEXs) are finally gaining ground versus centralized exchanges (CEXs), and Carbon aims to bring the next wave of traders on-chain.

Carbon highlights:

• Carbon flips the concentrated liquidity model popularized by Uniswap V3 on its head. 
• Users have historically been required to provide liquidity in one price range. 
• With Carbon, users can create a single concentrated liquidity position that buys in one price range, and sells in a separate price range.
• These capabilities give users an unprecedented level of control to execute novel trading strategies on-chain, including native limit and range orders, and recurring “buy low, sell high” strategies.

Buy and sell ranges can be placed above and below a set price based on where a user expects a given token will trade, automating the process of “swing trading” any standard ERC20 token. For example, if you believe Ethereum (ETH) will trade in the near future between $1700 and $2300, a Carbon strategy can be set to automatically buy ETH between $1700-2000 and sell the ETH from $2100-2300. Recent backtests showed a 2-3.4X increase in profits versus traditional concentrated liquidity provision.

By design, Carbon orders are:

• Automated: As the market price moves into selected price ranges, orders are executed by spot traders who interact with Carbon strategies directly, via DEX aggregators, or as arbitrageurs. All with no reliance on oracles or keepers.
• Irreversible: Unlike existing on-chain liquidity protocols where users must manually monitor and withdraw their liquidity upon execution in order to finalize a limit or range order, Carbon orders are final upon execution, eliminating the risk of order reversal.
• Adjustable: Strategy updates can be made in a highly gas efficient manner, without needing to withdraw and re-add liquidity, via parameters in a strategy’s smart contract.
• Composable: Users can submit individual orders or combine their orders together to create “recurring strategies” that buy a token low and sell it high in specific price ranges, in perpetuity, using a single source of automatically rotating liquidity.
• MEV Resistant: Spot trading is completely resistant to the most common form of Maximum Extractable Value (MEV), sandwich attacks.

Learn more:

• Carbon Website
• Creative Assets
• User Guide
• Whitepaper
• Litepaper
• Carbon Vs. Other AMMs
• Carbon Explainer (Video)

About Carbon

Carbon is a decentralized trading protocol allowing users to perform automated trading strategies using custom on-chain limit orders and range orders, with the option of combining orders together to create automated buy low, sell high strategies. By design, Carbon orders are irreversible on execution, easily adjustable directly on-chain, and resistant to MEV sandwich attacks. These capabilities give users an unprecedented level of control and automation to perform novel trading strategies on-chain.

About Bancor

Bancor is an ecosystem of decentralized, open-source protocols that promote on-chain trading and liquidity. Bancor invented the first blockchain-based automated market maker (AMM) in 2017. All Bancor ecosystem protocols are governed by the BancorDAO via staked BNT.

Featured image sourced from Shutterstock

This content contains sponsored advertising content and is for informational purposes only and not intended to be investing advice. Cryptocurrency is a volatile market; do your independent research and only invest what you can afford to lose. New token launches and small market capitalization coins are inherently more risky than large cap cryptocurrencies. These tokens are subject to larger liquidity and market risks.