Introduction

As we mentioned, Quiver is made so that it is very easy to provide liquidity to, but extremely hard to take liquidity away from. We can now explain exactly some of the useful properties our system has.

At Quiver, all incoming new orders are delayed by a fraction of a second. This is made so that market makers and arbitrage bots providing liquidity to Quiver have enough time to update their orders according to what happens on other exchanges.

This means that providing liquidity to Quiver is very easy. In particular, when running a Maker-Taker Arbitrage bot on Quiver, you can expect your failure rate to be very small!

As soon as we have plenty of these bots, liquidity from all other exchanges will end up being duplicated at Quiver. This means that our exchange has the potential to have very deep liquidity.

If these bots are competing with each other, their profit margins will be small, and Quiver will be guaranteed to have both bids and asks that are as close as possible to the best prices on any other exchanges. This can sometimes be very significant, and result in over 90% lower effective execution costs for traders!

At the same time, it is quite hard to take liquidity away from Quiver. If you try to build a “Sniper” bot that attempts to buy/sell at Quiver based on price movements from other exchanges, you will find that your orders are likely to not get executed, as liquidity providers will have a window of opportunity to update their prices.

A regular trader, however, is unlikely to send orders to Quiver that are synchronized with large movements on other exchanges. Therefore, these traders continue to have good execution quality.

There are other interesting properties of the Quiver Engine:

• If you have a limit order on Quiver, and the fair price on other exchanges have moved very quickly against you, your order is expected to be protected and receive price improvement, so that it always trades very closely to the fair price.

• When you send a taker order to Quiver that causes an impact on the market, you always trade as much as possible on the previous, old price. For example, if you are buying a large amount, you will end up buying whatever is available at the lowest possible price.

We’ll see now how the Quiver Engine works and how it satisfies these properties.