Orion Protocol ($ORN) Review – Explained How Does It Work

Orion Protocol ($ORN) offers a unique liquidity aggregator that connects major exchanges into one simple platform. Orion sees traders having difficulty in performing profitable transactions from popular exchanges. And while there are many exchanges to choose from, the liquidity in these exchanges remains an issue and not everyone has the time to research which exchange offers the best returns. Hence Orion wants to set itself apart, not by competing with exchanges, but by aggregating their order books into one simple terminal.

Background

Alexey Koloskov, CEO and Co-Founder of the Orion Protocol, launched the project in 2020 in a bid to deal with the problems of large exchanges monopolizing the cryptocurrency exchange market. In his view, both centralized and decentralized exchanges have their fair share of issues. Centralized exchanges are vulnerable to hacks, whilst decentralized exchanges are still relatively underdeveloped.

Hence accordingly to Yanush Ali, CSO of Orion Protocol, their project is exactly what the cryptocurrency industry needs today as it is a truly decentralized platform that meets the demands of businesses and consumers alike.

What is Orion Protocol?

Orion Protocol is an open-sourced, decentralized finance project mainly created to aggregate liquidity from different major liquidity providers i.e. exchanges. Primarily, Orion helps users get the best return out of their funds while lowering the risks associated with going onto multiple exchanges (both centralized and decentralized).

Orion operates by collecting the liquidity offered across multiple exchanges in the cryptocurrency market into a single, universal API. This API combines multiple order books from exchanges in order to make it easier for users to make trading calls whenever they wish to.

For example, when the user makes an order and a single API call is made, Orion itself will split and route this action to multiple exchanges at once. This leads to them being able to find lower buy and sell spreads and eventually the best exchange prices for users.

With Orion, traders do not have to bother themselves too much with APIs from different exchanges, data formats, modes, and order types. They can just focus on executing their trades or managing their assets.

In addition, Orion seeks to address another risk from centralized exchanges — hacking. Hot wallets usually provided by online cryptocurrency exchanges are susceptible to hacking. Recent reports already revealed how vulnerable centralized exchanges (and even decentralized ones) are. And users have no option but to deposit their cryptocurrencies there for trading, which inevitably puts them at risk. Orion’s non-custodial solutions try to solve this by letting users freely manage their assets on the platform, whenever and however they want, without ever giving up their private keys just to do so.

Along with Orion’s multi-currency wallet, it is easier to keep track of your portfolio’s overall performance as they can easily be found in just a single API. The hassle in using and maintaining multiple wallets just to trade in multiple exchanges is eliminated.

Since Orion is open-sourced, third-party developers can join the protocol and make their own decentralized applications on top of it.

Orion Products

Orion aims to be a one-stop-shop, so naturally, they have a whole suite of products and an ecosystem for traders. Let’s take a look at them in turn.

Orion Trading Terminal

The trading terminal is Orion’s platform to allow traders and investors to conveniently execute trades in its universal API. In just a single call, users can make trade orders that will be automatically executed across different exchange platforms in search for the best spot prices.

If users want to invest in emerging blockchain initiatives or are interested in purchasing new tokens, they can also perform such transactions with Orion’s trading terminal.

Portfolio management application

Instead of having to check different accounts from multiple exchanges one by one just to monitor your portfolio, Orion simplifies the process by collecting all relevant information together in a single tool for the user.

Orion’s portfolio management application allows users to monitor and record their activity across exchanges, set alarms for arbitrage opportunities, and automate asset management processes, among others.

All these processes do not require the user to give up custody over their funds because the application offers a non-custodial portfolio management feature. Surrendering your private keys to a third party is no longer necessary.

App store

Orion has a marketplace of decentralized applications that users can access to purchase Orion-based software. Many of these software may be third-party developments built on top of the protocol. Some applications users can gain access to are:

• Arbitrage apps;
• Algorithmic trading bot; and,
• Payment integration systems.

Enterprise trade

While interoperability is a concern for some aggregators, Orion has developed a system made to address this. Orion has its own extension that firms and traders can embed into their own software to provide access to Orion’s API.

Liquidity boost plugin for exchanges

Orion has its own plug-in that centralized and decentralized exchanges can place on their own platforms to contribute to Orion’s aggregated liquidity. This also helps bring market-makers to exchanges at a reasonable fee.

Orion shared liquidity pool — brokers are liquidity providers who hold funds in exchanges while also executing orders on behalf of the users. They stake a minimum amount of ORN tokens to join the liquidity pool. The more ORN they have, the more fees they get from executing orders.

DEX launcher

This is the platform where users can launch their own decentralized exchange with access to Orion’s liquidity. It is not just a simple method to open new exchanges but also provides instant liquidity.

Orion Token ($ORN)

Orion Protocol’s native utility token, $ORN, is an ERC-20 token. The token supply is capped at 100,000,000 ORN and the circulating supply is around 3.8 million coins. Orion claims it is committed to ensuring ORN’s sustainability and they aim to achieve this through several means:

• providing uses for the token;
• non-inflationary staking;
• diminishing supply;
• benefits for holders; and
• refund opportunities.

Uses for ORN

ORN can be used throughout its various products. For example:

• Orion terminal: Users receive fee discounts when paying using ORN, and can earn terminal transaction fees and interest by staking ORN tokens.
• Decentralized brokerage: brokers are required to stake ORN in order to be chosen to execute trades. Whilst non-brokers can stake ORN to vote for their chosen broker.
• Orion Enterprise: All licensing fees generated will be used to buy ORN from the market and removed from the total supply.

Non-inflationary staking

Currently Orion has a multi-exchange pre-staking initiative and according to them, it yields a 39% APR. Apparently it is so lucrative that 50% of circulating ORN ahs already been staked.

Upon Mainnet launch in Q4 2020, Orion will utilize a Delegated Proof of Broker (DPoB) staking model. This model has 2 components: Broker Stakers and Non-broker Stakers. Brokers run the Orion Broker Software, which automatically executes trades routed there from Orion’s liquidity aggregator. The more ORN staked by the Broker, the more likely they are chosen to execute trades. Brokers can also increase their chances of getting chosen through Non-broker Stakers who stake ORN to “vote” for their chosen Broker to execute the trades. Both Broker Stakers and Non-Broker Stakers receive rewards. Broker Stakers receive a portion of fees from each trade they execute, whilst Non-Broker Stakers a variable reward share offered by the Brokers in exchange for their vote.

The DPoB model for staking ORN is non-inflationary because, under existing mechanisms used by other exchanges, miner/staker benefits are typically minted as new tokens which hurts the underlying asset over time. Orion departs from this existing mechanism because Orion does not mint tokens for the purpose of giving rewards, instead, DPoB stakers receive rewards that are generated through Orion’s 13 revenue streams. This in turn preserves the necessity and the value of the ORN token.

Diminishing supply

Orion actively removes ORN from ciruclation (thus increasing its value over time) through the following means:

• Staking: Under the DPoB model, both Broker and Non-Broker stakers remove their ORN from the circulating supply. The rewards generated are compounded into their stake which further reduces circulating supply.
• Licensing fees: 100% of licensing fees generated from Orion’s DeFi solutions will be used to purchase ORN from the market and removed from circulation.
• Refunds: ORN tokens refunded via the Dynamic Coin Offering (DYCO) will be destroyed.

Benefits for ORN holders

As seen above, Orion Terminal users get fee discounts when paying using ORN and stakers get additional incentives.

Refund opportunities

Orion is the first project ever to implement a DYCO. 80% of the funds which were raised during the token sale were set aside to buy-back holders’ tokens if they so requested. Any refunded tokens will be burned.

Where can I trade ORN?

ORN can be purchased with Ethereum (ETH) or USDT in several exchanges such as KuCoin, BitMax or Uniswap (v2), although according to Coingecko, it is most actively traded on Bilaxy exchange. Orion also claims that through a multi-exchange pre-staking program, ORN tokens can be staked on Bitmax, KuCoin and Biki for staking rewards of approximately 39% APR.

Orion roadmap: What can we expect?

Orion’s token sale had ended on 14th July 2020 and as mentioned above ORN is already listed on several exchanges. In the upcoming Q4 2020 we can expect the launch of the public mainnet, decentralized brokerage and Orion price oracle. Most importantly upon public mainnet launch the DPoB staking model will be place.

Here’s a look at Orion’s roadmap:

Orion Protocol Review Conclusion

The challenge for traders and investors is how they can make sure that the transactions they make are still profitable. This is because day-to-day market prices can be manipulated by crypto whales and other large investors as they influence overall liquidity.

Orion’s aggregated liquidity promised to solve this issue and so far, it is off to a good start. With Orion, no single entity or investor can influence its aggregated liquidity. Users can consider this platform if they want to execute trades that are much more profitable, or if they just simply want to have a better view of how their portfolio is performing on different exchanges.

More educational guides for DeFi & Staking