KittenSwap Preview (1): Bridging AMMs and OrderBooks with Wide Limit Orders

1. On AMMs and OrderBooks

  • Good at price discovery and easy to use.
  • However LPs suffer IL and traders are often frontrun by bots.
  • Do not have IL and frontrun problems.
  • However liquidity can be scarce especially for new tokens.

2. Wide Limit Orders: smarter limit orders

  • Sell 100 token @ 0.09 ETH per token.
  • Sell 100 token @ 0.10 ETH per token.
  • Sell 100 token @ 0.11 ETH per token.
  • If you buy 100 token from the WLO, the price is moved to 0.0971.
  • If you buy 200 token from the WLO, the price is moved to 0.1038.
  • If you buy 300 token from the WLO, the price is moved to 0.11 and the order is fully executed.

3. WLOs: the bridge between OrderBooks and AMMs

  • If you set it narrow, it is like usual limit orders in OrderBooks.
  • If you set it wide (such as “Sell 10 ETH @ 1500~5000 USD per ETH”), it is a bit like being a Uniswap LP (on one side of the liquidity).
  1. With WLO, you can contribute to just one side of the liquidity.
  2. With WLO, you have much better control over everything, such as the price and width of the WLO.
  3. With WLO, you are no longer providing liquidity after your order is fully executed.
  4. In AMM, all liquidity are concentrated into one pool instead of multiple orders, therefore making a trade can be quicker.




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