Understanding the Need for Spicenet

DeFi has always been the pinnacle use-case of crypto, to bring finance fully on-chain. Make finance more scalable, transparent, verifiable and for the first time, encourage financial "building blocks", that unlock innovation. However, most of DeFi has arguably failed on this promise. DeFi today is either a bunch of copy-paste DEXs that all look and feel exactly the same, or siloed use-cases that never really took off. And most of DeFi today is centralized APIs masquerading as open-source, permissionless finance. Innovation has also mostly stifled. This sector's major breakout products, namely Ethena, Hyperliquid and Pendle are all concepts/ideas that have already existed before. Ethena isn't the first delta-neutral stable.

So what's lacking in DeFi? We believe it's the lack of permissionlessness, verifiability and most importantly, lack of innovation that brings forth totally new use-cases and products. Spicenet bundles the infrastructure and liquidity stack required to bootstrap new trading use-cases into one single, easy to use developer SDK. Today, building out new trading use-cases is a minimum 1.5-2 year stretch. Teams often need to reinvent the wheel by building the same existing infrastructure, go for audits, and secure liquidity commitments. Spicenet offers 2 key protocols that abstract these processes for teams, allowing them to focus on product, UX, GTM and user acquisition. These protocols are the Spicenet Liquidity Network, and the Open Exchange Protocol.

The Spicenet Liquidity Network provides a unified and composable liquidity layer, one that is free of fragmentation, and is fueled by Flashbooks: the flagship Intent-AMM orderbooks sourcing liquidity from Spicenet's Network-Owned Liquidity initiative and external liquidity sources via intents. By enshrining liquidity at the network level, Spicenet ensures applications can inherit this liquidity for their use-case, without ever fragmenting liquidity. In fact, as more applications join Spicenet, liquidity becomes more productive, driving better yield for LPs(solvers and Network-Owned Liquidity vaults).

The Open Exchange Protocol is a module boilerplate allowing applications to customize and choose from a variety of collateral assets, markets and instruments. Applications can therefore be highly opinionated and heterogenous, being selective about the collateral they want to support, markets they want to feature, and type of instruments they desire(spot, futures, etc). The Open Exchange Protocol also features a fully integrated money market, and a state-of-art risk engine, designed to price risk effectively. By abstracting the infrastructure and liquidity workloads from apps, Spicenet promotes permissionless finance and unlocks innovation at the application layer.

The end goal of Spicenet is to cultivate a flourishing ecosystem of trading applications, utilizing a shared liquidity layer, and benefitting off of open and customizable exchange/risk infrastructure. DeFi integrations are also directly built into the chain, in the form of expanded collateral, native USDC issuance, and so on, allowing apps to fully focus on their product, GTM and user acquisition.