# About LEXER Markets

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2F0wfhYRiHiSq7k0OfqEH0%2Fimage.png?alt=media&#x26;token=0650b770-b3cb-4a65-b245-4975793f7db1" alt=""><figcaption></figcaption></figure>

Lexer is a decentralized perpetual trading platform supporting a wide range of markets with deep liquidity.\
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The core features of Lexer are:

* Crypto, Forex, NFT and Indices markets
* Up to 100x leverage
* High real yield liquidity provision without impermanent loss
* Advanced risk management

## How does LEXER work and what makes it unique?

Lexer is powered by its one-of-a-kind **Hybrid Liquidity Engine** and **Smart Router** on top of an evolving group of **Oracle-based Settlement Algorithms**.&#x20;

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2Fg1ZAFt6K0glhz72ANNdQ%2Fimage.png?alt=media&#x26;token=2f79a8db-3d22-4a4f-af5d-1bcc3be4029e" alt=""><figcaption><p>Lexer Architecture</p></figcaption></figure>

### What is Oracle-based Settlement Algorithm?

Oracle-based settlement algorithm is a group of transaction settlement algorithms that rely on data from on-chain oracles, instead of liquidity reserves as in CFMM based models or liquidity depth in order-books.&#x20;

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2FML9wzTC6bQrrJ1BMgJAi%2Fimage.png?alt=media&#x26;token=e3a12b52-2b8d-4fe8-a8ab-17a6f811893c" alt=""><figcaption><p>Different settlement models</p></figcaption></figure>

#### Advantages

* No price impact
* Low to zero slippage
* Instant settlement
* High capital efficiency for liquidity provision
* Enabling markets without physical inventory

#### Challenges

* Individual liquidity models only work well for specific types of assets and functions
* Advanced risk management for LP is required for different market conditions
* Oracle manipulation and front-running attacks

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2F6lSBSvhszxIO2J99UMR7%2Fimage.png?alt=media&#x26;token=044a1876-95e4-44ec-9a84-144da5f88305" alt=""><figcaption><p>Individual models work best only for specific markets and cases</p></figcaption></figure>

### What is the Hybrid Liquidity Engine and how does it overcome these challenges?

The Hybrid Liquidity Engine combines multiple liquidity models into a single trading platform. Instead of trying to make one model fit all use cases and markets, the hybrid engine makes use of the strengths from each model without the weaknesses, thus enabling more markets easily without compromises.&#x20;

More on the Hybrid Liquidity Engine [here](#what-is-hybrid-liquidity-engine).

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2FPea49PX7qo9QYNwjJ8DY%2Fimage.png?alt=media&#x26;token=087c088c-a246-4a61-a7e6-3977a4aab51b" alt=""><figcaption><p>The Hybrid Engine makes use of the strengths from each model without the weaknesses</p></figcaption></figure>

### What is the Smart Router?

The Smart Router is the decision-making mechanism that routes trades into the right liquidity engine in order to optimize efficiency and performance. The Smart Router determines the best route for each trade to bring proper utilization and balance between engines, which can help to improve the trading experience. Additionally this provides the possibility of integrating more trading engines into Lexer, which ultimately opens up the platform to more variety and market availability.&#x20;

More on the Smart Router [here](https://docs.lexer.markets/innovations-and-mechanism/smart-router).

<figure><img src="https://3829974999-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaJnNHr3gcmsyKfMhDOqi%2Fuploads%2Flh7tAPTkrZQijeVhkq4p%2Fimage.png?alt=media&#x26;token=baef030a-f812-4151-b8dc-d536caf7abfe" alt=""><figcaption><p>Smart router unifies access to multiple LP engines and provides frictionless experience</p></figcaption></figure>

## What Lexer v2 can do for...

**Traders**

* Access to a wide range of markets with deep liquidity
* A seamless trading experience

**Liquidity Providers**

* High real yield opportunities without impermanent loss
* Flexibility to choose what types of markets to back and earn risk-adjusted returns&#x20;

**Ecosystem**

* Cross-protocol margining is made possible
* New potential legos for building advanced Defi strategies