Hybrid Orderbook System

Polynomial Trade features the world's first hybrid orderbook + AMM system, combining the best of both execution models.

System Overview

Dual Execution Paths

  • Orderbook (CLOB): 200ms latency, built in Rust, fully audited

  • AMM: Oracle-based for guaranteed liquidity and zero slippage on large trades

  • Intelligent routing: System automatically chooses the best execution path

Execution Logic

  • Limit orders → Orderbook (for precision and price control)

  • Market orders → AMM (for guaranteed liquidity)

  • Large trades → AMM (zero slippage on big positions)

Technical Specifications

Central Limit Order Book (CLOB)

  • Latency: 200ms (faster than a blink)

  • Technology: Built in Rust for maximum performance

  • Security: Fully audited by Macro Security and Octane Security

  • Capacity: Handles high-frequency trading like a pro

AMM Integration

  • Oracle-based: Uses Pyth Network for price feeds

  • Guaranteed liquidity: Always available for market orders

  • Zero slippage: Large trades execute without price impact

  • Dynamic pricing: Adjusts based on market conditions

Pyth Lazer Integration

Performance Improvements

  • 1ms price updates (vs. 400ms+ elsewhere)

  • ~70ms end-to-end latency vs Binance

  • Negative latency possible at times

Benefits

  • Eliminates toxic flow: No more arbitrageurs exploiting stale prices

  • Tight spreads: AMMs can run with minimal spreads

  • Low fees: Reduced fees due to better price accuracy

  • CEX-quality execution: DeFi transparency with centralized exchange performance

Market Evolution

Early Markets

  • AMM dominates: Provides liquidity bootstrapping

  • Higher spreads: Necessary for initial liquidity provision

Mature Markets

  • Orderbook dominates: More efficient price discovery

  • Tighter spreads: Better execution for all users

Adaptive System

  • Real-time optimization: System adapts to market conditions

  • Automatic routing: No user intervention required

  • Best execution: Always delivers optimal fills

Fast Execution Architecture

The Speed Problem in Traditional AMMs

Traditional AMM trades are notoriously slow, taking 7-11 seconds to execute a single trade:

  • User confirms order on-chain: ~500ms-7s

  • Chain confirmation: 2-3s

  • Keeper execution: 2-3s

  • Total: Up to 11 seconds per trade

In volatile markets, this delay is an eternity for traders trying to close positions quickly.

Polynomial's Solution: Optimized Order Flow

Polynomial's architecture cuts execution time down to 2-4 seconds - a 3-5x improvement over traditional AMMs.

How It Works

Instead of sending orders on-chain first, our optimized flow works differently:

  1. Direct Keeper Routing: Orders go straight to the keeper

  2. Price Fetching: Keeper fetches current market price

  3. On-chain Execution: Keeper executes the trade on-chain

  4. Instant Confirmation: User receives immediate confirmation

Key Benefits

  • Lightning-fast executions: 2-4 second execution times

  • Better user experience: No more waiting for slow confirmations

  • Reduced slippage: Faster execution means less price movement

  • More competitive with CEXs: Closing the gap with centralized exchanges

  • Higher capital efficiency: Faster position management

  • Lower risk during volatile markets: Quick exits when needed

Future Optimizations

With upcoming optimizations like flash blocks, Polynomial could potentially reduce execution times to under 200ms - faster than some centralized exchanges.

This represents a key moment in DeFi's evolution, where fast execution - traditionally CEX's killer advantage over DEXs - is becoming a reality in decentralized trading.

Future Enhancements

Dynamic Routing (Coming Soon)

Market orders will intelligently split between orderbook and AMM based on:

  • Current liquidity depth: Real-time assessment of available liquidity

  • Trade size: Optimal routing based on position size

  • Spread analysis: Real-time spread comparison

  • Market conditions: Adaptive routing based on volatility

Benefits

  • Maximum efficiency: Optimal execution for every trade

  • Zero thinking required: System handles all optimization

  • Better fills: Improved execution quality across all market conditions

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