Omni Liquidity Provider (OLP)

The Omni Liquidity Provider (OLP) is a vertically integrated OTC liquidity provider that ensures deep liquidity for Variational listings by aggregating across different sources, including exchanges, market makers, and AMMs.

How It Works

OLP uses the Variational Protocol just like any other user would. In fact, one could create a system similar to OLP with the Variational API.

• Settlement Pool Creation: a settlement pool is created between OLP and each Omni user upon account creation. Recall that settlement pools are segregated escrow contracts, so one user getting liquidated has no effect on other pools.

• Margin Requirements: both OLP and Omni users are subject to margin requirements. This means both parties are required to deposit collateral into their settlement pool, and may be subject to liquidation if their margin levels fall below requirements.

• Continuous Quote Provision: OLP provides quotes 24/7 on all supported markets.

• Trade Clearing Process: once an Omni user accepts a quote, the resulting trade is cleared following Variational's standard flow for all peer to peer (bilateral) pools.

How OLP Is Funded

The Variational team develops the quoting algorithms underpinning OLP. In the initial phase, Variational will provide seed capital for OLP. Once the system's stability is proven over time in production and has a good track record of generating market-neutral yield, we intend to open it up to depositors via a community vault.

Like any market making algorithm, there is a risk that OLP loses money. Users should carefully understand the risks of OLP and the protections that the Variational Protocol provides in terms of locked collateral and liquidation rules.