Limit Orders in DeFi: Intuitive Approach To Age-Old Tool
With DeFi being more popular than ever, it was bound to adapt to the growing need for good UX and CEX-like capabilities. However, the need was not supplied with good enough tools and hence we could say an average user finds it hard the first time being in DeFi.
And that kids how we started Symphony’s first product YOLO, yield optimized limit orders. We went 2 inches ahead of the game and built everything missing in DeFi like limit orders, stop-loss orders, and safe yield(👀)into one single product.
In this article, we are going to talk about how limit orders help onboarding users onto DeFi in an easy way.
Limit Orders: A Missing Link
With CEXs taking the limelight for all the crypto news, DEXs apparently still an underdog, a collection of blockchain protocols and networks that enable individuals to interact directly with financial products and services falls heavily when we talk about new users onboarding.
The crowd flocking onto DEXs and DeFi needed something easy to grasp, what’s better than the most used trading tool in financial history, limit orders. With that being said, we need to understand the audience that DeFi and DEXs cater to:
- Active Trader — Is always online, always doing DeFi things, swaps manually, and preferably a market order.
- Passive Trader — Is researching, loves the easy way centralized exchanges handle trades.
AMM-based DEXs have given the ability to provide much easier market order swaps, but the missing link “limit order” never found its worth, until new users started joining and getting confused frequently.
Limit orders are extremely important for the 2nd type of trader, a passive trader. Heck, active traders can also use limit orders to fill in the orders they always wanted for those volatile assets.
Limit Orders — Opportunities
With YOLO we have beautifully integrated limit orders in a decentralized way. With this CEX like capabilities, it opens the door to many opportunities which were never there for both active and passive traders.
Zero Slippage: AMMs are great but they have a major disadvantage known as “Price Slippage”. Most AMMs try to reduce it, some succeed, most don’t. Limit orders have Zero Slippage. This is the best feature that a limit order offers to traders.
No more missed opportunities: Who doesn’t have that one asset that you would love to buy at your desired price in DeFi. Now you can do that without worrying much about the dips and pumps.
No need of being online 100% of your time: DeFi ≠24*7 Online, with limit orders in DeFi you don’t need to be online all the time, set and forget your orders just to fill when it hits the price point.
No unplanned losses, less price impact: We have all been there, when you swap in a DEX the asset pumps live, making you FOMO hard. Limit Orders allow you to fill orders only at the price range you specify. With Stop Losses, you don’t have to be concerned about the price plummeting to zero overnight.
More research: DeFi traders stop making swaps when they sleep. However, with Limit Orders, they are free to use up the time to research more into the asset class, leading to having extra time for more deep analysis.
Happy GF(or Family): Yeah, I am serious.
Symphony and YOLO:
With YOLO, we always had this one goal in mind: No investor should lose any of his/her initial capital. And hence, we decided to innovate the already present limit orders to generate yield in DeFi.
An active + passive trader’s favorite way to buy/sell crypto assets in DeFi, without worrying about market volatility much, and top of that you creating an order makes you eligible to earn some juicy yield in the safest way possible with protocols like AAVE, Compound, Balancer, etc.
It might come as a surprise to those who haven’t stumbled upon our project yet, but yes, that is how YOLO innovated limit orders in a nutshell.
We have already covered YOLO in-depth, nevertheless here’s the step-by-step way how to set a limit order on YOLO and start earning yield.
- Select the input asset.
- Select an output asset.
- Set the limit price according to your needs and enter the input amount. If the market price is higher than the limit price, the order will be fulfilled instantly.
- Accept the input asset via the wallet.
- You can also choose to put in a stop-loss. If the price goes below that threshold, the order will be filled.
- To create the order, click the confirm button on your Web3 wallet.
- That’s it, now sit back and enjoy the yield and orders being filled just like in CEXs.
PS: Please try to use at least $50 for the trade, due to the nature of our product, an amount smaller than $50 will face a hard time getting filled quickly.
DEXs seek to provide the same functionalities as CEXs but in a decentralized ecosystem. And, in other areas, DEXs have already surpassed CEXs, such as AMMs, multiple ways to generate yields, etc. Limit order functionality is a critical tool for moving the segment forward, we strive to close the gap between alternatives given by CEXs and DEXs.
Have you tried out our dapp yet? If you haven’t, head over to https://app.symphony.finance.
We also invite you over to our discord server, come and be a part of the exciting future that we are building — http://discord.gg/HsVP3KP3VD
Also, check out our Twitter and give a follow if you haven’t yet https://twitter.com/SymphonyFinance
That’s it for now, I will be back with another article soon. Take care till then, GO YOLO!