2026-01-12 19:29:17

Let's discuss an interesting topic: understanding market liquidity in the order book using the arc length formula.

The traditional formula is C = s · 360° / θ (known arc length to find the angle). Can we reverse engineer the concept of a "market perimeter"? That is, the effective capital scale within the order book.

The core idea is simple—within the order book, the price change rate is analogous to an "angle" in geometry. Suppose the current mid-price is P₀. When a capital amount V enters the market, the resulting price impact can be viewed as a "shadow angle." Based on this relationship, we can derive a new dimension to measure market depth.

In other words, the thickness of the order book depends not only on the number of orders but also on how much capital can absorb price fluctuations while maintaining stability. Viewing liquidity from this angle allows for a more precise assessment of the true risk-bearing capacity.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

18 Likes

Reward
18
10
Repost
Share

Comment

0/400

DogeBachelor

· 01-15 19:15

Bro, this perspective is quite unique. From a geometric model, the liquidity flow of the order book is indeed refreshing.

View OriginalReply0

ForkYouPayMe

· 01-14 16:47

Awesome, using geometry to model liquidity... it feels like there's something there, but I need to verify it practically to see if it's reliable.

View OriginalReply0

OffchainOracle

· 01-14 07:42

Wow, this idea is pretty clever. Using geometry to map order book depth, there's really something to it.

View OriginalReply0

governance_ghost

· 01-12 19:59

Wow, using geometry to model the order book? I have to give a thumbs up for that idea... But whether it works in practice depends on how the market reacts.

View OriginalReply0

FlyingLeek

· 01-12 19:58

Haha, this approach is a bit wild, using geometry to model liquidity... But on the other hand, the impact on price has indeed been underestimated.

View OriginalReply0

HypotheticalLiquidator

· 01-12 19:52

This framework is interesting, but to put it simply, it is about quantifying the "fragility" of liquidity—the problem is that when the market panics, this "market perimeter" will collapse instantly, and your mathematical model can't save you.

View OriginalReply0

TokenDustCollector

· 01-12 19:50

This idea is a bit wild, turning liquidity into geometry... but the actual risk-bearing capacity is indeed often overlooked.

View OriginalReply0

FrogInTheWell

· 01-12 19:49

Oh, this perspective is a bit novel, but I wonder if modeling mathematical frameworks on real on-chain transactions might be too idealized...

View OriginalReply0

GasFeeNightmare

· 01-12 19:36

Wow, this idea is pretty interesting—viewing slip as an angle to assess liquidity? Forget it, I still think market depth isn't that simple.