Thread by @residualbitcoin

0/ (Long Thread Alert)

Kromatika's FELO (Fees Earning Limit Orders) are an innovative approach to limit orders in the #Ethereum Ecosystem.

🧵👇

1/ What are limit orders though?

It is a direction to buy/sell an asset at a specified price. This allows traders to exercise better control of the prices at which they trade avoiding volatility.

A limit can be placed either as a buy or a sell order.

$KROM #DEX #DeFi

2/ Limit orders on DEXes:

A lot of DEXes that offer limit order are not fully decentralized but rather centralized as they rely on market makers to process its limit orders.

It is quite complicated to make a decentralized limit order hence they depend on market makers for this.

3/ Process:
User (called the Maker) places an order ->
order enters centralized database ->
marketmaker (called Taker) decides to fulfill order or not.

This removes the #decentralized aspect and it functions as a "delegated delayed swap".🙃

4/ It is one of the reasons that an order can go un-filled even after crossing user's target price. This is a pain point since they'd rather have instant swapped at the price and ensure a good fill instead of waiting and then getting nothing.

Here is a screenshot from #1inch.

5/ This is where @KromatikaFi FELO enters the playing field.

Once a limit order is created, the user becomes a liquidity provider automatically for his token in the price range of his target. (No market makers required).

Position is automatically created on #Uniswap V3 pool.

6/ When market price enters the price range, the user begins to earn LP fees (coz he is a LP provider now) automatically on his token.

#Chainlink Keepers are activated in the background to monitor price 24/7.

continued below..

7/ As soon as target price is crossed, the Keepers' smart contract employed by @KromatikaFi is responsible to get the order filled 100%, and automatically removes output token from the pool along with LP fees to return it to user's dashboard.

$KROM $LINK #Chainlink

8/ Also, the orders are settled off-chain and that means the user is protected from all #bot #MEV attacks.

Since there is no market maker, and Kromatika uses #Uniswap V3 concentrated liquidity tech, the user is also protected from swap fees and price slippage. 🔥

$KROM $UNI

9/ To summarise:

FELOs are 100% decentralized. The user can "Set and Forget" his limit order because Kromatika has automated the entire process of filling the order, earning LP fees, protection from slippage+BOT attacks and returning the output token back to the user.

$KROM

10/ Of course, the token (pair) must have enough volume in the #Uniswap V3 pool. This is a given for the order to be completed.

In my opinion, there is no other #DEX that offers such innovation while being 100% decentralized.

11/ The LP fees earned on top of the user's limit order covers gas fee + service fee and also adds a bit of extra in most cases.

This is a win in the #DeFi space.

Protection + a little extra gains.

$KROM

12/ @KromatikaFi is releasing an updated UI sometime in the first quarter of 2023.

I think this is an incredible product that needs attention as it also automated an incredible tech like @Uniswap V3 conc. liquidity.

Anyone can take advantage of it without technical know-how.

13/ If you enjoyed this tweet, please do RT the first tweet of this post.

Also follow @KromatikaFi and join their active community on Discord and Telegram.

It is a project run by the community.

$KROM #DEX #DeFi