# Orderbook DEXs: the next exit for crypto? By [ZK Zhao](https://paragraph.com/@zkzhao) Β· 2023-06-22 --- ![](https://storage.googleapis.com/papyrus_images/122b09da89316c46c76bc2dfa3089e9b.png) Image tldr * 3 major types for orderbook dex: rollup-based, fully-onchain, high-perf * dydx v4, hyperliquid, vertex, aevo, orderly, apex are doing some interesting new developments in this space * security, convenience to existing exchanges and GTM strategies are the things that matter most for orderbook dex exchanges. 1/ Landscape ============ There are many orderbook exchanges. Understanding them involves grasping a performance-decentralization trade-off (the diagonal); increased performance implies more centralized design. Here's breakdown: \- CEX: Max performance, highly centralized (@FTX\_Official) \- fully on-chain: Max decentralization, performance-limited; unfit for orderbook due to high gas fees (@GMX\_IO) \- roll-up based: Off-chain orderbook for performance; settlements handled on-chain in batches for security & lower gas fee (@dYdX v3, @zkLinkorg @OrderlyNetwork) \- high-perf chain: A tailored chain to cater to the high-performance demand of the orderbook (@dydx v4, @Injective\_, @vegaprotocol, @SeiNetwork) As for metric comparison, I recommend @DefiLlama: [https://defillama.com/protocols/Derivatives](https://defillama.com/protocols/Derivatives) 2/ Interesting developments you might have missed ================================================= 2.1 @dydx --------- v4 launch coming soon (Q3?). I admire their daring vision of creating a fully decentralized, performant exchange, which is fully open-sourced. [![User Avatar](https://pbs.twimg.com/profile_images/1364590285255290882/hjnIm9bV_normal.jpg)](https://twitter.com/dYdX) [dYdX](https://twitter.com/dYdX) [@dYdX](https://twitter.com/dYdX) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/dYdX/status/1658608097957478400) As we approach the launch of v4 Mainnet, we want to provide a peek into what the dYdX team is building. This post presents a high-level overview of the architecture of v4. Read more below ![πŸ‘‡](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f447.png) [ ![](https://pbs.twimg.com/card_img/1671291405757562881/vDKM3bjv?format=jpg&name=600x600) dydx.exchange v4 Technical Architecture Overview ---------------------------------- We want to provide a peek into what the dYdX team is building. This post presents a high-level overview of the architecture of V4. ](https://t.co/6bwg78oLW1) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 254](https://twitter.com/dYdX/status/1658608097957478400)[ 06:59 β€’ 2023εΉ΄5月17ζ—₯ ](https://twitter.com/dYdX/status/1658608097957478400) 2.2 @HyperliquidX ----------------- A high-performance chain that seems to be developing faster than dydx πŸ˜‚ (mainnet now) \- all actions are on-chain, for example, [https://app.hyperliquid.xyz/explorer/address/0x63c621a33714ec48660e32f2374895c8026a3a00](https://app.hyperliquid.xyz/explorer/address/0x63c621a33714ec48660e32f2374895c8026a3a00) \- no gas for orders, curious about their DDoS defense πŸ€” [![User Avatar](https://pbs.twimg.com/profile_images/1646991609416806408/vKLEZxhh_normal.png)](https://twitter.com/HyperliquidX) [Hyperliquid](https://twitter.com/HyperliquidX) [@HyperliquidX](https://twitter.com/HyperliquidX) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/HyperliquidX/status/1658854481738465285) 0/ Introducing the Hyperliquidity Provider (HLP) vault: democratized market making HLP runs MM strategies on the Hyperliquid exchange. Anyone can provide liquidity for HLP and share in the P&L. Like the Liquidator vault, HLP is community owned and doesn't collect any fees. ![](https://pbs.twimg.com/media/FwVvW79aUAAujmZ.png) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 93](https://twitter.com/HyperliquidX/status/1658854481738465285)[ 23:18 β€’ 2023εΉ΄5月17ζ—₯ ](https://twitter.com/HyperliquidX/status/1658854481738465285) 2.3 @vertex\_protocol --------------------- one of the most feature-rich rollup-based orderbook DEX \- combines orderbook & AMM (Better composability?) \- on-chain risk management (no more liquidation by hayes πŸ˜‚) \- unified margin across spot, perps & money markets [![User Avatar](https://pbs.twimg.com/profile_images/1570789755498991624/Dw_u3ePp_normal.jpg)](https://twitter.com/vertex_protocol) [Vertex πŸ”](https://twitter.com/vertex_protocol) [@vertex\_protocol](https://twitter.com/vertex_protocol) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/vertex_protocol/status/1671187312980692992) 1/ Introducing Liquidity Pools on Vertex ![🏊](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f3ca.png) Vertex’s AMM is live - provide liquidity, earn fees and utilize your LP positions as margin. The days of choosing between yield farming or trading are over! Put your swim-shorts on anon, let’s dive into Pools ![πŸ‘‡](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f447.png) ![](https://pbs.twimg.com/media/FzFAACQaUAAt6a2.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 82](https://twitter.com/vertex_protocol/status/1671187312980692992)[ 00:04 β€’ 2023εΉ΄6月21ζ—₯ ](https://twitter.com/vertex_protocol/status/1671187312980692992) 2.4 @aevoxyz ------------ options + perp + otc; a first in the market; provides portfolio margin with strong backing from @ribbonfinance, @paradigm. They've executed very well since launch [![User Avatar](https://pbs.twimg.com/profile_images/1501254214424489990/InGGkKwq_normal.png)](https://twitter.com/ribbonfinance) [Ribbon Finance](https://twitter.com/ribbonfinance) [@ribbonfinance](https://twitter.com/ribbonfinance) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/ribbonfinance/status/1644313267932893184) Aevo is finally live on mainnet ![πŸš€](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f680.png) Follow [@aevoxyz](https://twitter.com/aevoxyz) and give Aevo a spin Bonus: we've airdropped all current Ribbon users 2 Aevo NFT passes each β€” one for you and one to send to a friend ![πŸ₯³](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f973.png) [![User Avatar](https://pbs.twimg.com/profile_images/1573233751340875777/-qBZiTFO_normal.jpg)](https://twitter.com/aevoxyz) [Aevo](https://twitter.com/aevoxyz) [@aevoxyz](https://twitter.com/aevoxyz) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/aevoxyz/status/1644311758889435136) It's launch day! ![πŸ₯³](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f973.png) After months of building in stealth, we're finally ready to open our doors to traders ![πŸš€](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f680.png) Welcome to [aevo.xyz](https://t.co/gBWmsi20Ig) ![](https://pbs.twimg.com/media/FtHE1FHagAAKy9M.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 67](https://twitter.com/ribbonfinance/status/1644313267932893184)[ 20:16 β€’ 2023εΉ΄4月7ζ—₯ ](https://twitter.com/ribbonfinance/status/1644313267932893184) 2.5 @OrderlyNetwork ------------------- offers trading-infrastructure-as-a-service, a different go-to-market strategy. Building an orderbook DEX is challenging; if Orderly simplifies it, we may see some amazing growth similar to GMX, but strong security is also needed. [![User Avatar](https://pbs.twimg.com/profile_images/1610066785025523713/2iij3ydV_normal.jpg)](https://twitter.com/OrderlyNetwork) [Orderly Network](https://twitter.com/OrderlyNetwork) [@OrderlyNetwork](https://twitter.com/OrderlyNetwork) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/OrderlyNetwork/status/1659097849659809792) ![🚨](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f6a8.png)Orderly fam, huge release!![🚨](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f6a8.png) What product captures 75% of all crypto volume? You guessed it - Perps! Our devs have been deep in the trenches, honing this on our platform. Now, we're rolling out the red carpet for you to join the first perp testnet. Try it at:… ![](https://pbs.twimg.com/media/FwZMf6cX0AAi71S.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 144](https://twitter.com/OrderlyNetwork/status/1659097849659809792)[ 15:25 β€’ 2023εΉ΄5月18ζ—₯ ](https://twitter.com/OrderlyNetwork/status/1659097849659809792) 2.6 @OfficialApeXdex -------------------- while dydx has moved away from starkex, ApeX is still building on it w/ good improvs \- cross-chain deposit (eth, bsc, arb, polygon, op, avax) \- smart lp \- app \- referral might be the most user-friendly orderbook dex atm. [![User Avatar](https://pbs.twimg.com/profile_images/1653676166019178496/MiSA6TpB_normal.jpg)](https://twitter.com/OfficialApeXdex) [ApeX Protocol](https://twitter.com/OfficialApeXdex) [@OfficialApeXdex](https://twitter.com/OfficialApeXdex) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/OfficialApeXdex/status/1659581244903141377) ![πŸ“’](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f4e2.png) Dear [#ApeXers](https://twitter.com/hashtag/ApeXers), hold onto your hats! We're ecstatic to unveil our brand new product on [#ApeXPro](https://twitter.com/hashtag/ApeXPro) β€” Smart Liquidity Pool ([#SLP](https://twitter.com/hashtag/SLP))! Prepare for a mind-blowing experience as we revolutionize market making and bring advanced strategies to EVERYONE! ![πŸ’₯](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f4a5.png)![🌟](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f31f.png) Read on![🧡](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f9f5.png)![πŸ‘‡](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f447.png) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 266](https://twitter.com/OfficialApeXdex/status/1659581244903141377)[ 23:26 β€’ 2023εΉ΄5月19ζ—₯ ](https://twitter.com/OfficialApeXdex/status/1659581244903141377) 2.7 @StorkOracle ---------------- A new oracle infrastructure. There're many oracles, but few see meaningful adoption outside their token πŸ˜‚. And yet, Stork is adopted by @vertex\_protocol and @OfficialApeXdex, as orderbook requires a faster oracle; love to see how they'll grow in future. [![User Avatar](https://pbs.twimg.com/profile_images/1588642130339168256/NMgZpZ3m_normal.jpg)](https://twitter.com/StorkOracle) [Stork: Pricing Infrastructure for DeFi](https://twitter.com/StorkOracle) [@StorkOracle](https://twitter.com/StorkOracle) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/StorkOracle/status/1669750894114615318) ![πŸŽ‰](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f389.png) One year ago, we launched Stork v1 and we're excited to celebrate! Let's dive into why we created the hybrid architecture and are thrilled to see more and more of DeFi embracing this model. [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 3](https://twitter.com/StorkOracle/status/1669750894114615318)[ 00:56 β€’ 2023εΉ΄6月17ζ—₯ ](https://twitter.com/StorkOracle/status/1669750894114615318) 3/ What matters for adoption? ============================= Due to my personal exp, I get asked a lot on what features matters for exchange adoption 🀣. exchange has innovative designs, but few gain traction. Here are my thoughts: 3.1 Security ------------ How secure can a DEX be? My fav example is @zkLinkorg; it shows even when it is down, funds are still safu. While many DEX claim they're safe, but in reality not, campaigns like this are proof-of-security and make good players stand-out. [![User Avatar](https://pbs.twimg.com/profile_images/1653925693418532864/4PmOBjg9_normal.png)](https://twitter.com/zkLinkorg) [zkLink](https://twitter.com/zkLinkorg) [@zkLinkorg](https://twitter.com/zkLinkorg) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/zkLinkorg/status/1656510474421440515) zkLink and ZKEX are temporarily down! However, you can now get back your assets from a recovery node! ![πŸŽ‰](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f389.png) Here's a step-by-step guide for the Dunkirk Test shutdown period of May 11 to 14, showing you how to recover your assets back into your wallet. Read on ... ![](https://pbs.twimg.com/media/Fv0bfe8aIAgPuyE.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 400](https://twitter.com/zkLinkorg/status/1656510474421440515)[ 12:04 β€’ 2023εΉ΄5月11ζ—₯ ](https://twitter.com/zkLinkorg/status/1656510474421440515) 3.2 Low Cost & Convenience -------------------------- Can users deposit from multiple chains? What's the order placement cost? How about fees, rewards, and rebates? Since users mostly come from existing exchanges, orderbook DEXs must offer a similar UX to encourage migration. 3.3 Go-To-Market Strategies --------------------------- While product features are often discussed, they alone don't ensure success. Why is @dydx v3 the biggest among multiple exchanges built on StarkEx, despite having similar features? To some extent, exchange is a network product (like twitter, fb) and liquidity is a cold-start problem. How to bootstrap liquidity? Choose perps vs. spot? How to stand out from competitors? @Bybit\_Official and @bitgetglobal are good case studies if you're familiar with their journeys. I'll leave a chart w/o comment πŸ˜‰ ![](https://storage.googleapis.com/papyrus_images/57d1660b3c3780eebbc27de61c07b97f.png) Image 4/ Future ========= We've seen remarkable progress in this space compared to the last cycle. I believe the journey doesn't stop here. Hats off to the teams shipping during the bear market, hoping we can finally free ourselves from figures like SBF and Gary πŸ˜…. And that's it, thanks ... for feedback and feel free give any advice, or point out any error or things I missed. --- *Originally published on [ZK Zhao](https://paragraph.com/@zkzhao/orderbook-dexs-the-next-exit-for-crypto)*