Omni-chain Liquidity

Tradable uses a liquidity provision model which allows users access liquidity on all major chains to support trading on tradable, creating a unified liquidity user experience for traders, market makers, and liquidity providers. This solves the primary DeFi problem of fractionalized liquidity on perpetual swaps.

Instead of having one vault on a single chain to collect trading margins and collateral (trading LP), tradable uses vaults on all chains to order a basket of approved stablecoins used as collateral to settle trades. This works by having two independent but interconnected systems: base chain and sublet chains.

This chain contains all dependencies upon which trades are settled. These include the trading logic, the endpoints to the tradable matching engine, and the reward and risk engines.

This chain is where trading collateral is collected and kept in a vault. When users deposit funds to trade, they also use these. Depending on our integrations, we could accommodate all chains that could potentially exist.

Tradable uses layer zero, a cross-chain messaging protocol to pass messages to/from our Base Chain and sublet chains. When traders place trades, we crosscheck their liquidity in our vault and send all the information to our risk engine, ensuring trades are settled correctly. When liquidity providers either provide or withdraw liquidity on one chain or the other, the protocol sends a message for reconfiguration of our central ledger to the base chain and either directly authorizes withdrawal in the case of availability of funds or the chance that funds have been used to rebalance other pools on other chains, the protocol uses a cross-chain bridge to move over funds to the sublet, thereby settling the withdrawal. The reverse is the case when providing liquidity. This withdrawal process also has different security checkpoints, allowing the team to monitor major withdrawal requests and net cash outflows.

To achieve omnichain liquidity and a seamless user experience, the protocol treats all liquidity on our sublet chains as values stored in a general balance sheet. When a more significant percentage of withdrawals are coming from a particular chain and deposits are coming from a specific chain, the protocol rebalances liquidity to make an outflow of funds seamless while ensuring that the available balance of funds on the protocol in general on all chains remains the same.