Behind the Ten Million Dollar Revenue of Orderly Network: Building a "Liquidity Central Kitchen"

Author: Xiyou, ChainCatcher

Editor: Marco, ChainCatcher

The booming development of multi-chain and Layer 2 ecosystems has brought more choices for users and developers, but it has also exacerbated the issues of liquidity fragmentation and disconnection between networks. However, users, LPs, and DEX project parties urgently need an efficient solution to address the global liquidity mobilization across multiple chains.

Orderly Network, a cloud liquidity infrastructure covering all chains, is reshaping the cross-chain trading experience for DeFi users with its innovative liquidity sharing concept. By integrating the liquidity of assets across all chains, it provides a one-stop solution for DEX-like platforms or products with liquidity needs, addressing the depth and cross-chain issues caused by liquidity fragmentation.

Founder Ran Yi has repeatedly emphasized in public that Orderly Network is not a DEX, but a liquidity infrastructure that serves DEX-like products. It offers users a plug-and-play liquidity solution that can be easily integrated, lowering the development threshold and making the DeFi trading experience as efficient and smooth as on CeFi platforms.

On August 16, Orderly Network announced the completion of a $5 million strategic round of financing, with participating investors including OKX Ventures, Manifold Trading, Nomad Capital, and others.

Funding of $25 million to build "CME in the Web3 field"

"Orderly Network was established in 2022, initially planning to create a 'dYdX' contract derivative (Perp DEX) on the Near chain. However, due to the development of multi-chain, DEX needs to solve the problem of cross-chain liquidity. Therefore, Orderly Network does not want to be limited to being just a DEX, but hopes to build an infrastructure that serves DEXs to achieve multi-chain shared liquidity, allowing DeFi users' trading experience to be as smooth as that on CeFi platforms," founder Ran Yi stated in a public interview.

Orderly Network is not a DEX, but a full-chain liquidity infrastructure that serves DEX products. By aggregating liquidity from various market participants such as market makers, brokers, and LPs, it enables developers to build DEXs, decentralized contracts, and derivatives that can compete with existing CeFi platforms in terms of liquidity and user experience.

This is primarily determined by the background of the Orderly Network team, whose founding members have extensive experience in crypto market making, exchanges, and public chains. Founder Ran Yi was a partner at the well-known crypto quantitative market maker Kronos Research and participated in the creation of the liquidity network WOO Network, promoting the development of the DeFi product Woofi. He also has over a decade of experience in traditional finance, making him a true cross-industry figure between TradeFi and Web3.

Since its inception, Orderly Network has received substantial financial support from several top crypto capital firms, with three rounds of public financing totaling $25 million.

In addition to the recent $5 million strategic round of financing, Orderly Network also secured $20 million in investment from well-known institutions such as Pantera, Sequoia China, Laser Digital, Dragonfly, and Jump during its seed round.

In the DeFi space, liquidity has always been the foundation of DeFi protocols. Currently, the usual way for DeFi protocols to obtain liquidity is through token incentive policies to attract LPs and maintain liquidity.

However, with the development of multi-chain, liquidity fragmentation has been a persistent issue for DeFi applications. This is not only reflected in the fragmentation between applications within a single chain ecosystem, but also in the increasing isolation between different chains, leading to a market divided into multiple relatively independent ecosystems. Funds and trading data struggle to move freely between them, thus limiting the overall efficiency and depth of the market, and making the trading experience for DeFi users less friendly. Users need to frequently switch between different platforms and chains to conduct transactions, resulting in a complex and time-consuming process.

As a result, most user transactions still remain on CeFi platforms. The primary task for DEX-like products is to unify and coordinate liquidity pools across multiple chains, enhancing liquidity depth, and ensuring that the trading experience of DeFi products is as smooth and efficient as that of CeFi platforms. Orderly Network aims to help users solve liquidity issues from DEX product development to execution in one stop.

Founder Ran Yi has publicly stated that in the traditional finance sector, the Chicago Mercantile Exchange (CME) group aggregates major securities brokers to provide an efficient matching trading market for both parties in securities transactions, acting as a centralized source of liquidity and the final settlement role. The vision of Orderly Network is to create the CME of the Web3 space.

Orderly Network is designed as an order book, which means that DEX or contract products built on it will have pages similar to CEX, supporting limit order trading.

Unlike common cross-chain liquidity infrastructures, Orderly Network integrates trading order information from different chains into a unified on-chain order book, creating a unified full-chain liquidity ecosystem that combines the best features of CEX and DEX, thereby improving trading efficiency, providing deeper liquidity, and reducing spreads.

The specific operational process involves Orderly Network implementing asset trading through three main functions: Asset Vault, Matching Engine, and Settlement Layer.

In simple terms, brokers can submit user-initiated trades to Orderly Network; the matching engine is responsible for trade matching, aggregating all trade information submitted by brokers; after matching, the information and data will be uploaded to the settlement layer for settlement, which will then transmit the final data to the vault to update the user's account balance.

Among them, the Settlement Layer Orderly Chain is the core product of Orderly Network's full-chain infrastructure, responsible for cross-chain data transmission, trade settlement, and ledger data recording.

Orderly Chain, built on the OP Stack, also utilizes Celestia's data availability and integrates LayerZero's cross-chain technology. The integration of these technologies enables Orderly Network to truly achieve multi-chain liquidity sharing.

In summary, Orderly Network provides DEXs, market makers, and various economic brokers with Lego-like creation tools related to DEX and perpetual protocols, and through providing a unified order book and liquidity, it executes unified settlements, thus solving the problem of liquidity dispersion between chains and significantly enhancing the trading experience for DeFi users.

Compared to TradFi, the unified order book liquidity of Orderly Network is similar to that of the Chicago Mercantile Exchange (CME), while the Settlement Layer Orderly Chain resembles a decentralized CME Clearing, integrating the capital efficiency of CeFi with the liquidity of DeFi.

Plug-and-play "shared liquidity central kitchen," anyone can create a DEX

As a full-chain liquidity infrastructure, Orderly Network primarily provides backend services for DEX-like products, including SDKs for developing DEX platforms, liquidity APIs, and other series of products, supporting anyone to create spot, contract, and derivative DEXs based on it, while also sharing its aggregated full-chain liquidity.

It is reported that building a DEX platform using Orderly Network's SDK components takes only a few hours; developers only need to focus on creating the interactive page for end users, while Orderly Network will handle subsequent trading data, business logic, and asset liquidity issues.

Orderly Network founder Ran Yi explained to ChainCatcher that Orderly is building a cloud infrastructure for liquidity covering all chains, or more directly, a "liquidity central kitchen." In the restaurant industry, there is a "central kitchen" model that supports anyone to open a store, with goods delivered and resolved by the central kitchen, allowing merchants to focus on their store and service without worrying about backend operations.

In comparison, Orderly Network is a "central kitchen for shared liquidity," where anyone can create their own DEX and customize their frontend display page according to their needs and user base. They only need to focus on user operations and various detailed services, while Orderly Network will provide one-stop solutions for liquidity, trading settlement, and other aspects.

In short, Orderly Network makes it possible for anyone to create a DEX platform. Especially DEX builders, games, wallets, trading bots, and market makers can integrate Orderly Network SDK to implement built-in trading functions in their products. For example, wallet developers can embed their own DEX in their products, and games can have their own asset trading platforms.

Founder Ran Yi believes that the future demand for DeFi should also be diversified, developing different DEXs for different users. For instance, users in Vietnam, Thailand, and South Korea have different trading needs, so there needs to be a trading page that aligns with local users' trading habits, rather than the current one-size-fits-all product pages.

Ran Yi stated that Orderly Network has built a bridge between DEXs and various trading brokers, and through a complete set of infrastructure products, supports anyone interested in DEXs or with community operation capabilities to create their own exclusive DEX products, requiring only a simple interactive page to provide trading products for users.

Currently, there are many influential KOLs or traders in the crypto market who earn income through CEX platform rebate agents, but they still cannot achieve precise customization for traders with different needs. With the help of the Orderly Network platform, these KOLs or traders can create their own DEX products, design their trading frontend pages, attract users to trade, and also gain more income.

60% of new trading fees will be allocated to ORDER token stakers, with over $10 million in self-generated profits

On August 26, Orderly Network's native token ORDER officially began its TGE and was immediately listed on multiple exchanges including Bybit, Hashkey, Kucoin, Gate, and Bitget, attracting widespread attention and investment from the crypto community.

On the day of the token launch, ORDER opened at $0.02 and surged to a high of $0.27, an increase of over 1000%, with the current price stabilizing around $0.20.

According to official data, the total issuance of the ORDER token is 1 billion, with 55% allocated for community rewards (including 13.3% for airdrops), 20% for the Orderly team and advisors, 15% for strategic investors and early supporters, and the remaining 10% reserved for the foundation, mainly to support ORDER token liquidity on CEX and DEX platforms, as well as ecosystem funding.

Airdrops are mainly used to reward early ecosystem supporters. For example, in March this year, the Orderly Network officially launched the "The Road to The Order" merit points competition, where users could earn merit points by completing corresponding interactive tasks. By the end of the event in June, over 230,000 addresses qualified for merit points, and it was announced that a total of 92 million ORDER tokens would be distributed to addresses participating in the event.

The airdropped tokens were fully unlocked on the day of the TGE on August 26, and users can check their claims at airdrop.orderly.network. Please note that the claim period for the ORDER airdrop is limited to 60 days after the TGE date, and any unclaimed tokens will be returned to the foundation.

$ORDER is the core driving force behind the normal operation of the Orderly Network ecosystem, with application scenarios covering trading fee sharing, community governance, and more. Its token economic model aims to coordinate the interests of all stakeholders to incentivize users to participate in the construction and development of the ecosystem.

Unlike the governance tokens of other DeFi applications, $ORDER is a utility token. Users can unlock various rewards by staking ORDER, the most important of which is that 60% of the new revenue generated by the Orderly Network will be allocated to ORDER stakers. When users unlock their rewards, they will ultimately be paid in USDC, truly empowering ORDER token holders with revenue through a DeFi product.

As of September 2, the staked ORDER amount is close to 35 million, with a staking yield of about 50%.

Unlike some DeFi products that play with concepts, Orderly Network has already achieved self-profitability before issuing its token.

Currently, the trading volume completed through Orderly Network has exceeded $80 billion, with platform revenue exceeding $17.4 million, and Orderly's net income exceeding $7.4 million, making it a truly self-profitable project.

During the sharp decline and fluctuations of Bitcoin on August 6, the demand for deep trading surged, causing Orderly Network's daily trading volume to soar to $1.8 billion, setting a historical high, with the revenue captured on that day exceeding $130,000, placing it among the top three in the DEX track.

According to Dune data, on August 29, Orderly Network's platform had a trading volume of $1.3 billion in nearly 24 hours, while the total trading volume of the entire DEX track that day was only $5.7 billion. The leading DEX platform Uniswap had a 24-hour trading volume of $1.76 billion, indicating that in terms of trading scale alone, Orderly Network's platform is already comparable to Uniswap.

Due to the impact of the overall crypto market environment, the recently launched ORDER token has been affected by the market. However, once the crypto market improves, DeFi will still be the main theme of the crypto market, and Orderly Network, as the underlying infrastructure product in this track, will be an important facility driving innovation in DeFi applications.

From the analysis of business models and profitability data, Orderly Network is one of the important potential projects in the DeFi space.

Well-known crypto trader @DefiSquared wrote in a recent tweet that among the recent TGE crypto projects, he is most optimistic about the future of Orderly Network, noting that the current market may have mispriced the ORDER token due to the overall crypto market impact.

He analyzed that Orderly Network, unlike a single DEX, has an unlimited number of cooperative projects that can be integrated, with a clear product-market fit and high growth potential. Additionally, it has strong backing, and after completing the token airdrop, the protocol can still achieve daily trading volumes reaching nine figures.

He believes that Orderly Network's current market capitalization is low, at only $25 million, with a fully diluted valuation of $155 million, which is undervalued by the market. Once the crypto market rebounds, it will be one of the highest-yielding projects.

Supported DEX applications exceed 20+, unlocking new scenarios for DeFi applications

Orderly Network, being a B-end infrastructure product, is not widely known in the crypto community, but the DeFi applications it supports are quite familiar, and many users have even used them, such as the decentralized exchange WooFi, the L2 perpetual contract LogX which received $6.1 million investment from Coinbase Ventures, the derivatives exchange EMDX, the liquidity protocol Elixir, and the cross-chain contract platform Vooi, which was recently selected for Binance Labs' seventh season MVB investment qualification. All these well-known DeFi applications in the crypto space are supported by Orderly Network.

Currently, over 20 DEXs are developing on the Orderly Network ecosystem, and this number will continue to increase as the business develops and improves.

In April this year, the cryptocurrency trading platform AscendEX announced that it provided users with on-chain service DEX options through cooperation with Orderly Network, thus achieving synchronized development of both CEX and DEX products.

In terms of ecosystem development, by supporting various DEXs, Orderly Network has formed its unique moat.

In terms of cross-chain expansion, Orderly Network has deployed six public chains, including the ETH main chain, Near, Polygon, Arbitrum, Optimism, Base, and Mantle.

In terms of liquidity depth, Orderly Network has partnered with over 20 top crypto market makers, such as Wintermute, Selini, and Riverside, providing users with ample trading depth, allowing Orderly Network traders to execute trades with minimal slippage and smaller spreads, making the trading experience comparable to traditional centralized trading platforms.

Crypto market maker Wintermute stated in July's collaboration with Orderly Network that compared to other DEXs, Orderly Network has the best liquidity in DeFi perpetual contracts, which is crucial for market makers.

Ran Yi explained that traders often focus on trading fees while neglecting slippage, which is caused by insufficient asset trading volume and liquidity, usually resulting in larger spreads when executing trades. As a professional liquidity provider, Orderly Network's infrastructure will provide strong liquidity, enabling traders to execute trades with minimal slippage and smaller spreads.

In essence, the liquidity of Orderly Network is shared among all DApp applications within the ecosystem. Regardless of which DEX traders use within the Orderly Network ecosystem, they access the same liquidity pools and order books.

The full-chain infrastructure of Orderly Network will connect traders from EVM and non-EVM chains in the future, forming a unified liquidity pool. This design not only enhances the efficiency of liquidity usage and trading depth, providing users with more trading options and a better trading experience, but also unlocks new usage scenarios for DeFi applications, allowing full-chain DeFi applications to truly land, enabling users to conduct transactions, repay, and store funds on any chain without being constrained by "chains."