Introduction of Limit Order to OpenOcean.
Hey guys, Happy New Year in advance🥳🥳
You know how sometimes you have to wait for the right price to execute a trade, and in the process of waiting you might miss the right moment ? Well, that’s no longer an issue with OpenOcean. The community members have been asking the development team to include limit order functionality for a while now and OpenOcean has finally answered !
As one of the last actions of 2021, OpenOcean will provide the long-awaited limit order functionality as well as an alpha leak for upcoming SaaS products for intelligent wealth management, which will initially include automated execution for your arbitrage strategies between DEXes and CEXes, as well as grid trading tools for DeFi and CeFi. The limit order functionality will be active for Binance Smart Chain for now with more chains coming up very soon.
For those readers feeling lost, I’ll explain the concepts within this development one at a time:
- Limit Order Functionality,
- How it affects Market Efficiency, and
- Alpha leak: SaaS products for intelligent wealth management
Without further ado, let’s dive right in.
Limit Order Functionality
Once upon a time, users could only set limit orders on centralized exchanges. These limit orders enable traders to place buy or sell orders for any asset at their preferred price, which will be carried out only if certain conditions are met. Oracles monitor the conditions and trigger smart contracts that are in charge of limit orders. Nowadays, users can employ this same system on decentralized exchanges.
Limit orders are an important resource for specialized DeFi trading because they allow traders to place orders based on strategies that can be stopped or altered at any time during the pending levels. Traders will be able to successfully manage their portfolios and hedge against fluctuation as a result of this process, which will require no actual physical involvement. A quick example: Imagine you have plans to buy BTC if the price drops to $40,000 or sell ETH if it crosses $5k. With a limit order, you wouldn’t have to constantly monitor the market prices all the time to make sure you execute the order at the right moment to properly maximise your returns. All you would have to do is set an order with your preferred prices and be rest assured that they would be triggered into action once the conditions are met.
How it affects Market Efficiency
Limit order functionality for DeFi trading attracts professional market actors such as proactive market makers (PMMs), who typically trade on CEXes or over-the-counter (OTC). This assists in bridging liquidity between CEXes and DEXes, increasing market efficiency and resulting in deeper liquidity and better pricing for traders.
The RFQ (request for quote) system works in tandem with the limit order system and is similar to an OTC system for DeFi trading, making it easier and less risky for PMMs to provide liquidity for DEXes. The RFQ allows PMMs to specify which orders they want to make/take, which are typically large and medium-sized.
Alpha leak: SaaS products for intelligent wealth management
OpenOcean is planning to launch an early-adopter beta access to its SaaS product, which will initially include automated execution for your arbitrage strategies between DEXes and CEXes, as well as grid trading tools for DeFi and CeFi.
This automated arbitrage strategy technique enables users to capture arbitrage opportunities between DEXes and CEXes, and it also executes automatically for users.
In terms of grid trading, users will be able to deploy trading bots that will automatically place buy and sell orders for DEXes within a price range they specify. Orders are placed above and below a predefined price, resulting in a grid of orders with increasing and decreasing prices that will increase over time.
Lastly, here are some more details about the limit order:
Initial trading pairs for limit order will be ETH/BUSD, ETH/USDT, ETH/USDC, WBNB/BUSD, WBNB/USDT, and WBNB/USDC. Also, the minimum limit order size is 30 USDT worth of token.