DX25 is a decentralized exchange built on top of the MultiversX blockchain. The platform will offer a comprehensive suite of trading features such as concentrated liquidity, multiple fee levels, true margin and derivatives trading and an intuitive, easy to use interface. Before we go any further, let’s understand how the MultiversX blockchain works.
What is MultiversX blockchain?
Previously known as Elrond, MultiversX is a highly scalable, secure, and decentralized blockchain network. MultiversX can handle a mammoth 15,000 transactions per second. This is significantly more than Bitcoin (5–7 tps) and Ethereum (15–25 tps). Along with being extremely fast, MultiversX is affordable, with fees ranging around a mere 0.001 USD.
How is MultiversX so fast?
MultiversX uses a layer-1 scalability technique called “sharding” to achieve such high speeds. Sharding breaks down the blockchain’s state into smaller, manageable fragments called “shards.” These shards could be processed simultaneously in parallel, greatly increasing overall network throughput. Of course, sharding isn’t limited to MultiversX — platforms like Ziliqa already use sharding. However, what makes MultiversX different is that it implements three different types of sharding — state, transaction, and network.
DX25 — Unlocking DeFi on MultiversX
The image above shows the snapshot of the MultiversX DeFi ecosystem. With overall TVL <100M USD, it is evident that the DeFi ecosystem on this chain has a lot of potential. Almost 93% of the overall TVL comes from one app — xExchange. Given MultiversX’s technical prowess, it could be safe to say that its DeFi ecosystem is severely undervalued with a lot of opportunity.
The ecosystem requires an innovative DEX that offers a comprehensive suite of features including:
- Allows for easy swapping.
- Incentivizes LPs to lock in more liquidity.
- Allows projects to receive liquidity without depleting their treasuries to attract more LPs.
- Provide proper on-chain derivatives trading that could rival CEXs.
DX25 has been specifically designed to be the ideal gateway to DeFi for MultiversX users. It provides an innovative market that supports staking, swapping, and derivatives. Let’s go through some features.
Feature #1: Concentrated liquidity
Like most modern DEXs, DX25 utilizes the concentrated liquidity model for AMMs. The “concentrated liquidity” model ensures that your liquidity is concentrated in a specific price range instead of being spread across the entire range. LPs only receive rewards if the token price is within that particular range. This CLMM model ensures that your liquidity is allocated efficiently and that the LP earns more fees for fewer tokens deposited.
Feature #2: Reduced complexity
While the CLMM model has several advantages, it can be extremely complex and require regular management. This increased complexity has driven out casual LPs. DX25 uses a liquidity management pool to reduce operational complexity for non-professional investors. LPs can delegate cumbersome management activities and operations to the pool.
Feature #3: Multiple fee levels
Every pool in DX25 will have 8 different fee levels ranging from 0.01% to 1.28%. This approach has three major advantages:
- By allowing LPs to select any feel level for their position, DX25 increases their profit-generating capabilities.
- Multiple fee levels guarantee the best swap price for traders through efficient internal arbitrage.
- Other DEXs deploy multiple fees by having multiple pools for each position with a unique fee rate. This approach fragments liquidity. DX25 ensures that all liquidity is optimally used.
Feature #4: Derivatives
DX25 will offer a highly diverse and innovative on-chain derivatives program. Leverage and oversight management is delivered in two phases:
- Initially, the system will function like existing perpetual DEXs. Credit will be created from one to another for basic optimization of P&L
- In the second phase, DX25 will develop a completely on-chain derivatives market by operating a separate collateral pool. Participants wishing to be part of the on-chain DEX must provide collateral into their own pool.
In Closing
DX25 will offer users an innovative new way to trade on MultiversX through a comprehensive suite of powerful features such as concentrated liquidity, multiple fee levels, true margin and derivatives trading, and an intuitive, easy to use interface.
