What a user want usually is just simple :
Position Exchange have a liquidity provider partner for the project to ensure that users are able to trade with sufficient liquidity and minimize slippage in the market. Such a traders, like me, would be happy for it.
Liquidity Problems :
Partner with market makers or liquidity providers who can supply the platform with the necessary liquidity.
Offer incentives such as rebates or fee discounts to encourage traders to provide liquidity to the platform.
Integrate with other exchanges or liquidity pools to increase the depth of order book.
MM / LQP : AAVE, Compound, Yearn
Speed Problems (This is by far among some traders) :
Optimize the code and infrastructure to reduce latency and improve response times.
Consider using a high-performance blockchain or layer-2 scaling solution to increase transaction throughput. Which we’ve done with OKC
Use a content delivery network (CDN) to reduce latency for users accessing the platform from different geographic locations. (Some part of country in this world having a trouble with RPC to access the platform)
— This is, however, an strategy from a friends to another friends that maybe can be considered
Reviewing smart contract code to ensure it is written in an optimized and efficient manner. This includes minimizing the number of contract calls and reducing gas costs wherever possible.
Order Book Caching : Caching frequently accessed order book data can help reduce the load on your smart contract and speed up order matching.
Collaborate with other exchanges to share liquidity and improve the speed and efficiency of the trades.
We are facing a liquidity problem in our Decentralized Perpetual Trading Protocol that could be addressed by implementing a combination of the following solutions:
1.Liquidity Aggregation: Similar to what Appolox has done, we could combine the order books of multiple exchanges, including both CEX and DEX platforms, to provide users with access to a larger pool of liquidity. This would help to ensure that there is enough liquidity to facilitate trades, and reduce the risk of price slippage.
2.Market-Making: We could also employ market-making strategies to provide liquidity to the platform. This could involve placing limit orders on both sides of the market, which would help to ensure that there is always enough liquidity available to facilitate trades. Market-makers could be incentivized through rebates on trading fees, which would encourage them to provide liquidity to the platform.
3.Decentralized Clearing: Similar to Appolox, we could use a decentralized clearing system that settles trades through smart contracts on the blockchain. This would eliminate the need for a central clearinghouse, which can often be a bottleneck for liquidity on CEX platforms. By using a decentralized clearing system, we could settle trades faster and more efficiently, which would help to improve liquidity.
4.Automated Market Maker (AMM) Model: Similar to dYdX, we could use an AMM model that provides liquidity using smart contracts. This would allow traders to access liquidity from a pool of funds that is available on the exchange, and as trades are executed, the liquidity pool would be adjusted automatically to ensure that there is always enough liquidity available to meet demand.
5.Non-Custodial Trading: Similar to dYdX, we could also offer non-custodial trading, which would mean that traders retain control of their funds and trade directly with each other. This would eliminate the need for a central authority to hold funds and provide a more secure and transparent trading environment.
By implementing a combination of these solutions, we might be to address the liquidity problem in our Decentralized Perpetual Trading Protocol and provide a more efficient and liquid trading experience for our users.