A Brief Analysis of Vertex v2 Shared Liquidity Order Book "Edge" Upgrade
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A Brief Analysis of Vertex v2 Shared Liquidity Order Book "Edge" Upgrade
Vertex Edge is an upgrade to Vertex's previous order sequencer.
Navigating Web3 tides with focused insightsAuthor: Yu Zhong Kuangshui
A month ago, I briefly introduced the upcoming updates to Vertex v2, the most important of which is: "building a product across multiple blockchains where users from different blockchains can share the same liquidity order book on Vertex."
Today, I'll dive deeper into Vertex's update to its shared order book liquidity layer called "Edge," as well as the @tradeonblitz protocol built on Layer2 Blast leveraging this "Edge" technology.
Understanding the "Edge" Architecture
Vertex Edge represents an upgrade to Vertex’s previous order sequencer.
We can directly understand Edge as an inter-chain shared order book. When users place trading orders through Vertex, these orders are matched by the off-chain order book engine of Edge with the deepest available liquidity, then executed and settled—matching one chain’s orders against liquidity from multiple chains.
Moreover, Edge is a cross-chain product. Users across different blockchains can submit trading orders via Vertex’s products deployed on various chains, enjoying low latency and minimal slippage. Vertex and its cross-chain-deployed DEXs provide frontend services for users, while Edge operates in the backend, enabling trades with superior liquidity depth.
Looking ahead, even other developers may have the opportunity to build products based on Vertex Edge, collectively expanding the Edge shared liquidity layer ecosystem.
Let’s take Blitz, deployed by the Vertex team on Layer2 Blast, as an example to see how it matches trades using liquidity from other chains (such as Arbitrum).
First, let’s introduce Blitz: Blitz is the first DEX powered by Vertex Edge, the inter-chain shared liquidity order book, supporting spot trading, perpetual contracts, and an integrated money market. Out of 3,000 teams competing in the Blast BIG BANG competition, Blitz successfully won one of the six Perpetual DEX Winner awards.
When we place an ETH sell order on Blitz, Edge matches our order with ETH buy orders on both Blast and Arbitrum, delivering us the best possible liquidity depth. Despite involving cross-chain message passing, the user experience remains seamless.
In other words, Blitz and Vertex actually share the deep liquidity provided by Vertex Edge.
Additionally, Blitz’s money market deserves special mention: thanks to yield-bearing ETH and stablecoins on Blast (ETH yielding 3%-4%, stablecoins 5%), USDC on Edge will also offer depositors a certain yield. This yield incentive will further attract more USDC liquidity.
Currently, Blitz has announced integrations with Juice Finance’s Elixir liquidity vault and Range Protocol on Blast, offering users liquidity vaults and automated liquidity strategies. Going forward, Blitz plans to launch a Points Drop campaign—keep an eye on Galxe for upcoming points activities (Blitz will launch shortly after Blast mainnet goes live on February 29).
Future Outlook
A brief look at Vertex’s potential growth drivers:
1. Fundamentals
Currently, Vertex’s trading volume accounts for nearly half of the perpdex market (excluding dYdX). Comparing data between Vertex and dYdX, Vertex’s 24-hour trading volume stands at $1.23B versus dYdX’s $1.15B—almost on par. However, $DYDX has a market cap of $1.53B and FDV of $2.54B, while $VRTX has a market cap of $79M and FDV of $411M.
From a token valuation perspective, $VRTX still has significant room for growth.
2. Intent Narrative
Edge is fundamentally a backend solution. What excites me more is the potential for the Vertex team or other developers to build imaginative, intent-centric frontend applications on top of Edge, significantly enhancing user experience.
From a product standpoint, the composability of Vertex Edge opens up vast new market opportunities.
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