Laughing out Loud with an Ox (ZRX)
There has been a myriad of discussions online regarding the Decentralized Exchange (DEX) and its merits vis-à-vis a Centralized Exchange like Binance.
It seems awkward while the premise of blockchain is found on the concept of decentralization — which is peer-to-peer by nature -, when it comes to the trading of cryptocurrency, almost all trading volumes transact via a centralized exchange.
To promote transparency and a trustless trading environment, more DEXs have popped into the scene. However, several factors have impeded the growth of DEXs, i.e., lack of the ability to aggregate demands and supply to boost liquidity, poor user experience, and the long period in which to complete a transaction, are among some of the critical issues.
Other players in the DEX space, like 0x (ZRX), have attempted to overcome some of these issues by developing a hybrid of on-chain and off-chain protocol. The former is employed when an order is made, and an entry to the chain submitted.
The latter relies upon many relayers to broadcast and find matching buy/sell orders. The relayers are incentivized by a fee the maker agreed with them upfront before the order is broadcast off-chain to their community.
In theory, such an attempt hopes to allay burden on the blockchain, thus improving the latency for a transaction to complete. However, it is debatable such an attempt can improve transaction speed by any experimental measures.
What it does introduce, however, is more opacity to the price discovery process. Relayers are individual or companies who collect a fee to broadcast order and find matches off-chain. Therefore, it falls back to human behavior and its associated bias. It is easy, even natural, for relayers to work with players whom they are familiar with or have an economic benefit. Know full well that the price discovery process can be manipulated, and the maker or taker has little to no visibility, whether they get a fair offer for their orders.
To pay for the work done by the relayers to broadcast the transaction, the ZRX token is used to replace any gas fee any buyer/seller may need to pay on the Ethereum platform.
In LOLDEX, we created a trading protocol which is entirely on-chain as we believe in providing a transparent and trustless environment to facilitate a level playing field for trading and issuance of tokens.
There is no longer a need for the issuers to find an exchange to list their token. All they need to do is to offer their tokens on LOLDEX. If they want to market their tokens for greater awareness, the issuers can use the fund they originally earmark to pay for the listing fee to promote their token.
The big news is that listing is free using LOLDEX. For traders, they have access to the LOLDEX trading protocol and a user-friendly user interface for free.
The LoLDEX trading protocol requires a trading fee on each smart contract of 0.01% of the trade to be sent to a smart contract that will buy back the LOL Tokens and then burn the LOL tokens. This way, the LOL Token is not used as a medium of exchange or fee, unlike the 0x (ZRX) protocol. Instead, it is seen more as a store of value and tends to assume the supply/demand price path, rendering it more valuable as more LOL Tokens are bought and burned when more trading fees are generated.
All of these measures were carefully considered within the LOLDEX team to ensure a level playing field for all traders to be unencumbered by excessive fees and manipulation.
In return, it is our view that the initiatives undertaken by LOLDEX promote a healthier crypto-currency trading environment and we look forward that more productive ecosystems rise to develop better blockchain projects.
You read correctly, LoL does mean Laughing Out Loud. LoLDEX. Remember the name.