We are excited to announce that we are launching Peti, an omnichain liquidity protocol that provides an incredibly smooth and cost efficient experience for power users while also providing the best liquidity efficiency for professional and institutional market makers. One of the challenges for users today is that it is often expensive, if not impossible, to execute large-size omnichain value transfers or swaps due to the high slippage of AMM pricing combined with the limited depth of the liquidity pools of cross-chain bridges. Now using Peti, users can utilize “just-in-time” liquidity to execute these omnichain transactions with zero slippage. In addition, users will also be protected from MEV with lock-in quotes. For market makers, providing liquidity to Peti is far more efficient when compared to providing it to protocols that require “always-on” liquidity. This is because the liquidity used for Peti is called upon only when there is an active request from users.
Peti is powered by Celer’s inter-chain messaging and is currently live on mainnet now. Celer cBridge has already integrated with Peti and other omnichain dApps and market makers can onboard via the Peti SDKs and API.
“Always-on” Liquidity is Considered Harmful for Market Efficiency
In order to accommodate the explosive growth of the ever-diversifying dApp ecosystem and user community, the blockchain ecosystem has evolved into a multi-chain world. Whether it is through layer-2 rollups or alternative layer-1 blockchains, developers are now building new kinds of dApps that have the ability to use storage and computing power that spans multiple chains. In order for users to actually harness the true power of this multi-chain world, highly efficient omnichain building blocks are required. One of such building blocks is a omnichain liquidity protocol that enables users and market makers to freely transfer and swap assets across this multi-chain world.
However, today’s omnichain liquidity protocols are not even close to being fully optimized, especially since professional users and market makers only rely on the current “always-on” liquidity pools that are so prevalent in today’s ecosystems.
For example, a cross-chain swap from token A on chain X to token B on chain Y with a single-click UX typically can be broken down to these three steps:
- 1. Swap token A to some intermediate bridgeable token, often a kind of stable token, using an AMM DEX on chain X;
- 2. Bridge the intermediate token via some liquidity pool-based cross-chain bridge to chain Y;
- 3. Swap the intermediate token to token B using an AMM DEX on chain Y.
Market makers today can provide liquidity to protocols involved in any of the three steps above. However, the above protocols all require liquidity providers to statically lock in their liquidity before an actual ominichain swap or bridge transaction is even needed. This creates a bit of an issue with having this “always-on” liquidity being under-utilized. Most of the time there is no usage for that liquidity and, while locked, it isn’t generating protocol fee yields at all. This kind of inefficiency leads to it being quite expensive for protocols to maintain properly deep liquidity with a reasonable level of incentives. As a result, professional market makers and liquidity providers tend to avoid these pools to seek higher yields elsewhere with better liquidity utilization.
This leads to a shortage of “always-on” liquidity, which then directly leads to a poor user experience. Users are exposed to high slippage from both the source chain and the destination chain AMM DEXes when making these cross-chain swaps and bridgings. On top of that, when executing a large-sized order, users often are not even able to find enough liquidity in these cross-chain bridges to actually complete the value transfer, or they suffer from extraordinarily high fees and slippage. To make things even worse, a bulk cross-chain swap is an easy target for MEV because the second leg of the swap often involves asynchronous cross-chain messaging which gives ample time for MEV hunters to set up a “sandwich trap” on the destination chain.
Peti: Efficient Omnichain Liquidity Protocol with “Just-in-Time” Liquidity
In order to solve the challenges of the “always-on” liquidity mentioned above, we created the trust-free omnichain liquidity protocol Peti that uses “just-in-time” liquidity instead. When users want to make an omnichain value transfer or swap, instead of going through the normal flow involving multiple decentralized exchanges and bridges, their Request For Quotes (RFQs) are sent directly to professional and institutional market makers. The market maker with the best pricing will be automatically matched with a cryptographically secured signature. The order is then executed atomically via smart contracts and cross-chain messages using Celer Inter-chain Messaging protocol.
Peti solves the liquidity inefficiency issue by not requiring market makers to have “always-on” liquidity on smart contract pools. Instead, it opens up market makers to only provide and lock in liquidity when users actually make an RFQ. This “just-in-time” approach enables market makers to take orders with liquidity that is pulled from other yield venues. As a bonus, after the order is completed, the market makers can again flexibly shuffle the liquidity to other uses until the next RFQ request is received.
This boosted liquidity efficiency naturally leads to a significantly improved user experience. Since their users are instantly matched with professional market makers with locked-in quotes on the target chain and with the requested assets, users no longer need to go through multiple AMM DEXes or cross-chain bridges. They can therefore avoid high slippage and fees from using multiple protocols. Additionally, users can execute much larger ominichain value transfers or swaps thanks to the liquidity flexibility that is provided to market makers through Peti. Finally, because the entirety of the order matching is done via off-chain cryptographical communication with deterministic pricing, there is a natural protection against sandwich attacks or other harmful MEV techniques.
It is also important to mention that Peti is trust-free and fully decentralized. This means that the security and execution of the orders do not rely on any single party. Under no circumstances can users or market makers receive funds from one another without fully completing the transaction.
Peti can be used for transactions happening within a single chain or across multiple chains as a truly omnichain protocol. From the end users’ perspective, the gas costs are much lower and user experience remains a simple one-click interaction.
Use Peti Now
Peti is currently launched on mainnet in production beta and has already integrated with leading market makers to provide liquidity. Peti is a pure API and SDK based protocol and there would not be any independent user interface. We welcome users, market makers, and multi-chain dApps to start try out and integrating with Peti today to see the benefits of this new protocol.
Peti has integrated with Celer cBridge to complement the liquidity pool based bridges for larger-size same-token bridge requests. Users will see a notification when an order is matched using Peti with better pricing but otherwise this will feel no different from the previous user experience.
For Market Makers
If you are interested in connecting with Peti as a market maker, please refer to the Peti market maker SDK documentation and the sample market maker implementation. During the beta phase, we will onboard market makers via a whitelisted approach so please fill out this form if you are interested in becoming an early market maker for Peti!
For Multi-chain dApps
Multi-chain dApps with omnichain value transfer and swap needs can easily integrate the Peti dApp API into their dApp. For example, cross-chain DEXes and bridge aggregators that only rely on AMM DEXes liquidity pools and bridges can utilize Peti for a better overall user experience. Other dApps like multi-chain NFT marketplaces, gamefi and DeFi dApps can also integrate Peti as a convenient way for users to move between different chains.
Initially, Peti will focus on usage growth by integrating with market makers and securing dApp integrations while enabling more omnichain liquidity availability. In addition, Peti will be focusing on mechanism designs in order to enable an open community ecosystem.