What is a Smart Order Router (SOR) in the Genius DEX?

  1. Decentralization: Genius Yield eventually plans to open source the SOR code for complete transparency. SORs will, as the Genius DEX liquidity increases, be open for everyone. They will be free to deploy bots based on their set of rules and algorithms. However, in the early stage, the Genius DEX SORs will only be deployed by vetted operators before the code is gradually released to the public. The overarching objective at this stage is stability. It was the same arrangement when Cardano transitioned from a federated system to complete decentralization during the Shelley stage.
  2. Programmability: SORs will be matching a wide range of configurable orders beyond simple market and limit orders. In the Genius DEX, traders can set complex order types like dynamic or algorithmic orders.
  3. Trading fees: The high determinism in Cardano increases the probability of transaction confirmation while keeping on-chain fees fixed and low. Genius DEX SORs exclusively make profits from bid-ask spreads, which fluctuate depending on volatility, trading volumes, and other market inefficiencies. In this system, traders also don’t have to pay for their orders to be matched and processed.
  4. Higher Liquidity: Since SORs only earn fees from bid-ask spreads, they can be incentivized to provide the trading of new pairs whose liquidity is reasonably low. As traders swap, SORs will consistently rake in higher fees. However, the flexibility of SORs to redeploy their service to other fragmented liquidity pools for higher profit margins present more advantages for the SOR operator.

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Genius Yield

Genius Yield

Genius Yield is the all-in-one DeFi platform, that combines concentrated liquidity DEX with an automated yield optimizer.