In-depth Analysis: What gives Gambit the confidence to become a successful DEX?
As the cryptocurrency field continues to grow and attract more participants, the financial industry is on the brink of transformation. DeFi is gradually expanding beyond the realm of cryptocurrencies and making an impact in the real world. With more assets being tokenized, traditional capital markets are also venturing into blockchain. The increasing preference of users towards derivative trading, as opposed to spot trading, is shifting the focus towards the booming track of crypto derivatives, which is already a trillion-dollar market.
Real World Assets (RWA) provide a unique opportunity for yield-hungry DeFi investors, allowing them to access a diversified off-chain debt market. At the same time, TradFi institutions are enabled to tokenize and issue debt/assets without being constrained by geographical location, thus bridging the gap between traditional and decentralized finance.According to a market trading report published by CryptoCompare in June of this year, the trading volume of crypto derivatives reached $27.5 trillion, accounting for 66.1% of the total trading volume. Despite subsequent declines in the crypto market, the trading volume in the crypto derivatives market remains at a relatively high level. Meanwhile, major traditional institutions are actively entering the RWA derivatives track. Goldman Sachs announced the official launch of its digital asset platform GSDAP, which has already facilitated the issuance of a two-year digital bond worth €100 million by the European Investment Bank (EIB). The Monetary Authority of Singapore (MAS) is also collaborating with JPMorgan and DBS Bank to participate in the RWA landscape. Binance, as the operator of Layer1 blockchain Polymesh, has announced its involvement, and DeFi protocols such as MakerDAO, Aave, and Maple Finance are making moves in the RWA track. More crypto investment companies are seeking RWA projects as well. Currently, there are over 50 projects in the RWA sector, primarily focusing on financial assets, including fixed income and TradFi, with a few in real estate and carbon credit domains.
There is no denying that the derivatives DEX track has experienced rapid growth in recent years, with a market value surpassing $2 billion, accounting for 7.9% of the total DeFi market value. However, currently, the derivatives trading market is still dominated by CEX (centralized exchanges), with DEX (decentralized exchanges) accounting for only 3% of the total trading volume. Nevertheless, the rise of DEX is clearly unstoppable. Compared to traditional CEX, DEX offers the characteristic of permissionless access, allowing anyone to develop new products on the protocol. DEX also exhibits resistance to censorship, effectively combating manipulation by centralized institutions.
The recent debacle of FTX has exposed the vulnerability of CEX (centralized exchanges), leading more and more investors to shift their focus towards DEX (decentralized exchanges). However, there are four key areas that DEX needs to address:How to conduct feature upgrades; whether it’s possible to provide the best market prices through liquidity aggregation; the importance of developing on-chain copy trading to attract more users; the need to focus on traditional assets to meet the diverse needs of users.
The Gambit team is an emerging player worthy of attention. They have established a unique infrastructure called GambitDEX, which is built on the evolving DeFi ecosystem and combines it with RWA through innovative ecosystem development. GambitDEX is an order book DEX that supports the trading of RWA assets, providing cryptocurrency investors with a more diverse range of trading and profit opportunities. GambitDEX is built on decentralized cross-chain technology, making it compatible with various cross-chain technologies and standards to bridge the gap between isolated public blockchains. This allows for the removal of barriers in the financial trading world and opens countless doors for liquidity between various assets.
opBNB is an L2 testnet launched by BNBChain. It is an EVM-compatible L2 scalability solution based on the Optimism OP Stack. BNBChain was introduced by Binance in 2020 as a decentralized application environment that offers users and developers faster, more secure, and cost-effective capabilities, especially during Ethereum congestion.
By choosing to deploy on the advantageous BNB blockchain, which offers more advantages than Ethereum, opBNB receives robust technical support from Binance. This support will provide a strong foundation for the future development of GambitDEX.
In terms of platform pricing, conventional exchanges often face the issue of short-term fluctuations due to liquidity, potentially resulting in unnecessary losses for users. However, GambitDEX has addressed this problem through specific algorithms. Specifically, GambitDEX prices are categorized into three types: real-time trading prices for GambitDEX contract products, spot index prices obtained through oracles from major platforms, and index prices specific to the GambitDEX platform.
GambitDEX utilizes at least seven different aggregators to ensure that the Chainlink oracle used by GambitDEX can continuously provide highly accurate and timely data. By employing a weighted algorithm that combines Chainlink’s price feeds and GambitDEX’s real-time contract trading price mechanism, the expected profit and loss of users’ open orders can be calculated. This mechanism helps to ensure greater price stability for GambitDEX, safeguarding user interests, especially during market fluctuations or potential manipulation of real-time trading prices.
In terms of on-chain trading, GambitDEX differs from traditional centralized perpetual contract trading platforms. Its main functionalities are deployed on-chain, ensuring maximum transparency and authenticity for user transactions. As every transaction is recorded on the blockchain, the traceability of each user’s trade is guaranteed, ensuring fairness in trading. Additionally, the trading process is executed entirely by smart contracts, and asset security is provided by the blockchain, eliminating any third-party interference. Users have complete control over their assets throughout the entire process.
In terms of user demand, GambitDEX supports perpetual contract trading for various mainstream cryptocurrencies such as BTC, ETH, and more. However, it goes beyond that. GambitDEX’s initial products are focused on RWA asset trading, and the team plans to expand their offerings to include highly liquid popular cryptocurrencies, as well as traditional assets like gold, forex, and US bonds. Furthermore, despite being a decentralized exchange, GambitDEX strives to provide users with a premium experience by offering a user-friendly interface and seamless operational experience similar to centralized exchanges.
The financial industry is undergoing a rapid transformation, driven by growing interest in blockchain technology and decentralized finance (DeFi). Gambit positions itself at the forefront of this development, catering to both cryptocurrency enthusiasts and traditional investors seeking portfolio diversification. GambitDEX is expected to excel in terms of functionality, pricing, trading, and user demand, making it a noteworthy disruptor in the DEX space and the RWA track. The Gambit team from the United Arab Emirates may emerge as a dark horse in the DEX industry, and we will closely follow their progress and innovations.
