Mangrove’s unique approach: offers as code
Mangrove solves these challenges by introducing the notion of “offers as code” (smart offers). Practically this means that liquidity/collateral does not have to be locked in a DEX itself but can be sourced from another pool or DeFi protocol once the order is hit.
This new DEX design enables participants to post offers that are not fully provisioned. The Mangrove’s order book thus lists promises instead of locked commitments, which are nevertheless programmatically enforced. The promised liquidity can be shared, borrowed, lent somewhere, and at the same time displayed on Mangrove, ready to be sourced when (and only when) an offer is taken.
The resulting consequences are far-reaching, because it removes liquidity fragmentation and the lock on assets, allowing its use in multiple places.
The recent collapse of FTX showed that while users appreciate the capital efficiency of an order-book exchange, trusting a centralized provider is not what crypto is about. By replicating the capital efficiency of a centralized exchange in a trustless and low-gas environment, Mangrove helps address fundamental problems in the market.
Mangrove was founded by a group of researchers in computational biology turned DeFi professionals during DeFi summer. They came up with Mangrove in 2021. The founders created the platform as a one-stop-shop where developers and DeFi protocols can build sophisticated trading strategies and integrate features including partial liquidations and carbon markets among others. Today, Mangrove’s programmable order book offers its users the possibility to use existing strategies to achieve higher returns or to develop their own strategies to obtain more flexibility.