Liquidity when you need it, and not a moment too soon
An aggregated platform service or layer that acts as a JIT intent-based limit order-book such that users are able to provide liquidity without locking capital.
Just-In-Time liquidity is the concept of providing liquidity for a transaction only at the point in which that liquidity is actually needed. A core issue within crypto broadly is the inefficiency of capital. This exists across several vectors, but one place it manifests is that capital is often idle or underutilized. JIT liquidity leverages the unique order execution mechanisms of blockchains to programmatically eliminate that issue.
Today, in order to transact on an exchange you must have the requisite capital associated with the trade you want to place. For example, if I want to swap 3500 USDT for 1 ETH, I need to have 3500 USDT on whatever dApp I’m using. I place a limit order and wait. While my limit order remains open, I can’t do anything with this 3500 USDT — in reality I should be able to take it and deploy it wherever I think is best. If my limit order never materializes, that’s ok because my capital isn’t simply sitting idle, it’s earning yield elsewhere.
Rather than relying exclusively on existing liquidity pools or order books, a JIT liquidity platform would use an intent-based order-book system. What this means in practice is that market makers (and retail users) are able to place bids/quotes on multiple different markets while maintaining the ability to use that capital elsewhere (i.e. on other DeFi applications for example) in the meantime. This opens the door for capital to be used productively while still potentially providing 4 major benefits:
By matching liquidity directly to specific trade intents, JIT platforms optimize capital allocation and utilization. This results in less idle capital & improved returns for LPs. It also compresses transaction costs as pricing becomes more competitive and slippage comes down.
There is >$100 billion in TVL across crypto today. A figure likely to continue growing as adoption increases and more institutional players migrate on-chain. Unlocking this capital to be more efficiently utilized will be a huge break-through for crypto and DeFi more generally.
There are more complications around the design here, including how to think about penalties & reputation-based scoring to mitigate bad behavior or toxic flow. There’s a world in which bad actors spoof the platform or use it to route bad orders, so there is certainly some nuance to the design.
This is optimally built either on a high-performance chain (Solana, Sui, Monad(?)) or as an app-chain on Cosmos. In theory it’s possible it could be built on an L2 but realistically the order of magnitude cost-per-tx makes this untenable at scale there.
IntentX
Drift (though this uses a RFQ system for JIT trading)
UniswapX
