Flash Liquidity: A Game-Changer for DeFi Trading

8 min readNov 14, 2024

Flash Liquidity unifies liquidity across the entire crypto ecosystem onto Radix, enabling seamless, capital-efficient trading without liquidity providers needing to pre-lock assets. It offers traders deep liquidity and low slippage while giving developers access to global crypto liquidity, all within a decentralized framework.

For a more technical explainer of how Flash Liquidity works, please see the Flash Liquidity Deep Dive Blog.

The Opportunity: Uniting Fragmented DeFi Liquidity

Decentralized Finance (DeFi) has introduced a new financial landscape where users enjoy transparency, security, and complete control over their assets. However, despite these advantages, DeFi still trails behind centralized exchanges (CeXs) in terms of user adoption.

Outside of the subpar UX offered by tools such as MetaMask, the primary challenge is fragmented liquidity. In DeFi, liquidity is scattered across different blockchains and platforms, often making token liquidity network-specific or even DEX-specific. As a result, users are forced to manage multiple wallets, frequently bridge assets across chains, and distribute funds across networks. This creates a complex, inefficient, and often frustrating trading experience.

Even after high-profile CeFi failures like FTX, where significant amounts of user funds were lost, centralized exchanges continue to dominate. Despite the risks of CeFi — such as poor oversight, security vulnerabilities, loss of funds and the risks of leaking personal data — users prefer the convenience it offers. On centralized platforms, trading is seamless, and liquidity is readily available, unlike in DeFi, where users must navigate fragmented ecosystems to access liquidity.

This gap presents a massive opportunity for DeFi. While crypto CeFi serves approximately 420 million users globally, DeFi has only captured about 5 million of those users. Crypto exchanges handle over $84 billion daily spot trading and another $102 billion in derivatives. While DeFi promises greater security and control, it hasn’t yet managed to capture anywhere near the share of this activity that it should have. What’s needed is a solution that brings liquidity together in one place, providing access to all crypto assets in a seamless, user-friendly way while maintaining DeFi’s core values of decentralization and user control.

The Solution to Fragmented Liquidity

Flash Liquidity, a groundbreaking intent based trading system being developed by Anthic on Radix, using Radix’s new transaction pre-authorizations, and directly addresses DeFi’s liquidity fragmentation problem. It allows Anthic to unify liquidity across multiple blockchains and platforms, offering users access to a wide range of crypto assets and combines that with the speed, liquidity, and efficiency of centralized exchanges. But unlike CeFi, Flash Liquidity and Anthic operate within a fully DeFi focused decentralized framework, ensuring that users remain in control of their assets at all times.

At the heart of Anthic enabled Flash Liquidity is an innovative approach to liquidity provision. In traditional DeFi systems, liquidity providers (LPs) must lock up their assets in specific liquidity pools before any trading can occur. This ties up capital and exposes LPs to risks like impermanent loss — where the value of their locked assets can change unfavorably during trading. Anthic flips this model by enabling market makers to provide liquidity without locking up their capital on Radix until a trade is confirmed.

This “just-in-time” liquidity model significantly improves capital efficiency. Market makers can source liquidity from across the entire crypto ecosystem and only bring it onto Radix when a trade is finalized. This allows them to offer deeper liquidity with tighter spreads. This also makes Anthic particularly attractive to institutional players and professional traders, who require deep liquidity, speed, and flexibility to manage their operations profitably.

For end-users, Anthic offers permissionless access to a vast array of crypto assets, lower slippage (the difference between expected and actual trade prices), and tighter spreads (the gap between buy and sell prices). This results in a trading experience that can be built to be as smooth as a centralized exchange but with the added benefits of decentralized finance: transparency, security, and control over your assets.

Addressing DeFi’s Core Challenges

Anthic enabled Flash Liquidity tackles some of the most pressing issues that have hindered DeFi’s growth:

Eliminating Asset Fragmentation: In traditional DeFi, tokens are often isolated within specific blockchains or platforms, forcing users to jump between ecosystems to access them. Anthic eliminates this problem by creating a unified system where all assets can be made instantly accessible on Radix via Flash Liquidity, regardless of where they originate. Whether a token is native to Radix or comes from another blockchain, users can trade it seamlessly within the Radix ecosystem.
Unified Liquidity Across Platforms: Using Flash Liquidity, Anthic consolidates liquidity from both CeFi and DeFi venues into the Radix ecosystem. This means users no longer need to switch between platforms to find liquidity; everything can be made available in one place, streamlining the trading experience and making it far more user-friendly.
Capital Efficiency for Institutional Traders: Professional market makers and institutional traders play a critical role in providing deep liquidity and competitive pricing, but traditional DeFi liquidity provision requires them to lock up capital on-ledger before offering liquidity. Anthic solves this with Flash Liquidity by allowing market makers to provide liquidity on demand. This ensures tighter spreads and deeper liquidity, benefiting institutional traders and the overall DeFi market.
Seamless Integration with DeFi dApps: Liquidity powers decentralized applications (dApps), from decentralized exchanges (DEXs) to lending platforms and stablecoins. Anthic ensures that liquidity can easily integrate with other dApps on Radix, unlocking new opportunities for developers to innovate and build more robust financial applications.

How Flash Liquidity Works for Users

Let’s explore how Flash Liquidity benefits different types of users:

Everyday Traders: Imagine you’re a trader looking to buy a token that isn’t native to Radix. Instead of needing to move assets to another ecosystem (or buy it on a centralized exchange), juggle bridges and wallets, and navigate multiple platforms, you can simply trade that token directly with Anthic, at the same (or better) liquidity as you would find elsewhere. Via Flash Liquidity and Anthic’s market making partners, a user can tap into the liquidity for a trade from wherever it’s available, and the trade is executed instantly. There’s no need to manage multiple wallets or navigate fragmented liquidity — all of this is handled behind the scenes, making your trading experience seamless and efficient.
Professional Traders and Institutions: As a market maker, you want to provide liquidity without tying up capital across various platforms. Anthic allows you to offer liquidity only when needed. You can remain capital-efficient while offering deep liquidity and tight spreads, attracting more trading volume and increasing profitability. This flexibility makes Anthic particularly appealing to professional traders who need to maximize their resources.
DeFi Developers: For developers building DeFi applications, Anthic offers the ability to tap into global crypto liquidity without worrying about which chain an asset is on. Whether you’re developing a DEX, a lending platform, or a stablecoin project, Anthic ensures that your users have access to deep, reliable liquidity across the entire crypto ecosystem. This opens up new opportunities for innovation within the Radix DeFi ecosystem.

How Flash Liquidity On Anthic Works

DEX Setup: Radix DEXs such as CaviarNine, Astrolecent and Ociswap provide trading interfaces to users that integrate against the Anthic trading APIs. The Anthic trading APIs provide a continuous price stream for the pairs that are supported by Anthic.
User Initiation: An end user reviews the pricing that is being offered by the DEX for the asset pair that they wish to trade. Once they decide to trade, the user signs a transaction pre-authorisation (aka Intent) that locks in the user side of the trade.
Market Maker Confirmation: The best pricing available from the Anthic market making partners is connected with the user trade intent, and the market makers provide an intent back for providing the other side of the trade, minted via Instamint into the market maker’s Anthic connected account.
Solver Resolution: A network of solvers pick up the two sides of the trade intents, bundle them into a Radix transaction and submit them to the Radix ledger to execute the trade.
Trade Execution: At the point of trade execution, the user’s side is passed into the market maker’s Anthic connected account, and the token the user wants to receive is minted via Instamint into the market maker’s account and passed atomically to the user.
User Settlement: The user can immediately use the Instamint issued tokens within the Radix ecosystem, which are fungible with all other Instabridge issued tokens of the same type. Or the user can choose to immediately off-board their tokens to the underlying asset, either via Instabridge directly, or via one of the trustless bridges available on Radix.
Settlement: Shortly after (<24h) the trade is finalized, the market maker settles their line of credit by sending the underlying token to Instamint. This minimizes capital lock-up while ensuring fast, efficient trades for the end user.

Flash Liquidity leverages intent-based order streaming to facilitate high-frequency trades off-chain before they get settled against a line of credit on-chain. This ensures liquidity providers can source liquidity from any trading venue without holding the tokens beforehand. This allows the market maker to offer liquidity across a huge range of tokens, minimizes risks like impermanent loss, and protects against MEV market manipulation tactics like front-running.

The Technology Behind Flash Liquidity

Instamint, powered by Instabridge, is the engine that makes Flash Liquidity possible. Instabridge is a VASP regulated token-wrapping service that already supports major assets like BTC, ETH, USDC, and USDT on Radix.

Instamint allows market makers to mint wrapped assets on Radix as needed, using short-term (<24h) lines of credit from Instabridge. This enables market makers to provide liquidity on demand and settle with the underlying assets as soon as they are obtained from the wider market.

This system ensures that liquidity is always available from Market Makers when required, without locking up capital ahead of time and without burdening the user with having to worry about the mechanics of the process.

Institutions get a regulated counterparty with which to do business. Users get trustless access to a universe of tokens across the entire crypto ecosystem without having to worry about ever touching Instabridge.

Anthic and the Future of DeFi on Radix

With Flash Liquidity, Anthic represents a transformative leap forward for decentralized finance. By combining and aggregating the liquidity and efficiency of centralized exchanges with the transparency and control of DeFi, Anthic offers users a non-custodial trading experience that has the potential to rival even the most advanced CeFi platforms.

For users, Anthic will mean better pricing on trades via their favorite DEX front ends, with access to a broader range of assets, and the confidence that comes from having full non-custodial control of their Radix assets. For market makers, it offers the ability to provide deeper liquidity without tying up capital unnecessarily. And for developers, it opens new possibilities for building cutting-edge dApps on Radix.

With Flash Liquidity, Anthic positions the Radix network to become a leading force in decentralized finance, offering a scalable, efficient, and secure trading environment for both retail and institutional users.