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MovEX is a community-driven organization built to provide the best trading and liquidity provision experience for users and project developers on [Sui](https://sui.io/) eco-system. The core products of MovEX are 1) a concentrated liquidity AMM + order book hybrid liquidity Decentralized Exchange (DEX); 2) Intelligent Liquidity Allocation service, which automatically adjusts liquidity to boost capital efficiency and market-making returns; 3) ILO (initial liquidity offering) service for project developers which provides customized token launch options to maximize raised fund.
The following document details the functional and technical aspects of the ecosystem products.
AMM has been one of the most fundamental innovations in the Defi space. It democratized liquidity provision, dominated initially by professional traders and institutions. AMM made it possible for retail users without advanced knowledge about finance to also earn passive income by providing liquidities. However, the most popular constant product AMM is known to suffer from low capital efficiency, leading to a high trading slippage problem. Uniswap V3 proposed concentrated liquidity AMM giving liquidity providers the flexibility to provide liquidities at a custom range and making it possible to provide single-sided liquidity without owning the token pair. Concentrated liquidity significantly improved the capital efficiency of the AMM, reduced trading slippage, and made it possible to develop customized liquidity provision strategies. Concentrated liquidity can also simulate advanced order types such as limit orders.
However, concentrated liquidity suffers from two significant problems — fairness problems and poor user experience for advanced order types. First, since the liquidity on AMM is unordered, the miner, or the validators in the case of PoS, can front-run other liquidity providers by injecting a dominant amount of liquidity around the spot price upon detecting a swap transaction from the mempool, therefore eating up most of the commission fees of this transaction. This is unfair for standard liquidity providers. The second problem is the poor user experience for advanced order types. Although concentrated liquidity can be viewed as an “unordered” order book with a fixed tick size, it’s still inconvenient or even infeasible to simulate certain advanced order types that professional traders require. For example, to stimulate limit orders, a trader has to first provide liquidity on a single side at the desired price range, wait for the token price to cross the selected price range, and then withdraw the liquidity. This would require the trader to either manually wait for the cross to occur and withdraw the liquidity or write a program to do it, causing a lot of hustle and defeating the purpose of a limit order. Another required order type, stop-loss order, cannot be simulated with concentrated liquidity.
MovEX combines the best of AMM and order book and delivers the ultimate trading and liquidity provision experience for everyone by creating a hybrid liquidity pool. Internally, MovEX has a settlement engine that distributes orders between AMM and order book, guaranteeing both minimal slippages for traders and fairness for liquidity providers.
Retail liquidity providers enjoy the convenience of providing single-sided liquidity at a custom price range and efficiently manage the impermanent loss.
Professional traders and liquidity providers enjoy the advanced features provided by the order book. Moreover, traders can also earn commissions if their limit order is filled. This is because limit orders are considered makers and, therefore, can receive commissions like liquidity providers, similar to centralized exchanges.
ILO stands for Initial Liquidity Offering, which aims to provide the best fundraising process for project owners. Traditionally, a fundraising process is split into two parts: a private token sale, where the project owners list their project tokens at a fixed price and receive stable coins (USDT/USDC) in return. Then, the project owner pair stable coins collected with their project tokens into an LP pair and inject them into an LP pool for IDO. During the IDO process, builders are often bothered by the problem of the poor capital efficiency of liquidity provision for their project tokens. It’s often unclear to project builders at what price range they should provide liquidity or how they should allocate liquidity at different price ranges. They usually don’t have the infrastructure or tools to rebalance their liquidity when their token price fluctuates. All of the above lead to poor capital utilization, suboptimal market making, volatility, and even the collapse of token prices.
The MovEX ILO service is a one-stop solution for project owners. MovEX ILO service allows project builders to select a time period, price ranges, and auction algorithms for initial token sales to maximize the fundraising return. The collected stable coins will then be automatically paired with project tokens to form a liquidity pool after the token sale. After that, MovEX’s intelligent liquidity management service will take control and automatically manage the liquidity pool for the project owners. Our liquidity management engine runs an optimizer internally, produces the mathematically proven optimal liquidity allocation under a particular utility function, and automatically adjusts the liquidity for users in a decentralized and non-custodial fashion. We help project creators avoid the hustle of manually adjusting liquidity and boost their capital efficiency and market-making returns.