In Crescent DEX, each liquidity pool act just like another market participant on orderbook. It calculates groups of limit orders for each tick in the orderbook with order amount derived from CPM. Then, all integrated orders on orderbook including liquidity pools’ are matched each other at once.
Concept of Hybrid DEX in Crescent Network
As illustrated above, AMM provided by the liquidity pool and traditional market makers coexist in Crescent DEX. That is so called hybrid DEX. This kind of hybrid DEX outperforms in perspective of capital efficiency so that traders (users of Crescent DEX) can enjoy the effectively abundant liquidity on the orderbook.
Note that because liquidity pools act like additional participants, multiple liquidity pools with same token pair with different configurations can participate on the orderbook at the same time under the fair matching system of the orderbook. This will be implemented in Crescent Network V2.