Here at Defispot, we are taking on the challenge of implementing a cross-chain, decentralized financial system.
Our vision is to remove the barriers for everyday people from managing their finances in a permisionless environment. Our mission is to accelerate the advent of decentralized finance (DeFi) by bringing a compelling, neutral, and easy-to-use interface to the DeFi market with trustless and non-custodial transactions.
We’re seeking economic freedom for every person and business. Therefore DefiSpot is all about giving the benefits of freedom to everyone, regardless of who they are and where they live.
Say hello to the widespread adoption of decentralized finance.
TL;DR What is DefiSpot?
DefiSpot is a multichain decentralized exchange (DEX) that aims to make it possible for users to swap, lend and add/remove liquidity to cryptocurrencies without needing a centralized third-party or requiring users to provide Know-Your-Customer (KYC) details.
The platform enables users to manage and trade their assets with greater transparency in a permissionless environment with a simplified and straightforward interface. DefiSpot makes it possible for everyday people to trade in a familiar environment but with decentralization at its core.
Our industry laid the building blocks of blockchain technology to break finance free from intermediaries, cultivate a new financial system, and give power back to the users. DefiSpot follows that tradition by enabling the masses to take back control of their finances through our user-friendly DeFi platform.
But ser, how is that even possible?
DefiSpot’s user interface will bring usability to the THORChain Protocol for all users by offering a traditional UI/UX to the DeFi sector — a DEX disguised as a CEX.
The THORChain protocol is multichain, which means the swapping between assets can take place across multiple blockchains. The combination of multi-chain swaps, lending, and synths on the back-end, integrated with a modern but traditional UI/UX on the front-end, will create the same user experience as managing and converting assets back and forth on Coinbase, but decentralized.
A decentralized version of Coinbase?
Exactly, and this is because DefiSpot is the first-ever DEX to create a traditional trading experience, with isolated liquidity from liquidity providers (LPs) who want to earn interest on their assets from permissionless transactions through the network.
DefiSpot’s user-friendly and modern interface design will make the platform approachable for everyone, regardless of experience or knowledge of the crypto market — available as a web, desktop, and mobile application.
If we want to create an open financial system that can help onboard millions of people, we’ll need to create interfaces that everybody can understand and use comfortably. Here’s how we plan to do that.
Problems with attaining the Masses
One of the most significant issues we face in the rapidly growing DeFi ecosystem is on-ramping new users, the average Joes. Simplifying their experiences with cryptocurrencies, dApps, and the underlying blockchain tech is one of the greatest challenges to widespread adoption.
Currently, only a few platforms are available that offer cross-chain native (not wrapped or pegged) assets. In addition, the options that exist are all branded with an appeal to specific niches. For example, users can easily identify the THORChain ecosystem with illustrations of lightning strikes, swords, and various fantasy illustrations. Thus, users must accept a certain level of cultural presentation in the respective community when taking advantage of these platforms.
DefiSpot stands out as a neutral, user-friendly trading platform that anyone can use no matter what community they are dedicated to.
If you look beyond the branding, most DeFi projects also lack some essential insight into how the protocol and the various aspects of the ecosystem function. For example, if you trade on any existing platforms, you will not be provided graphs, price history, or the necessary information most people demand of a professional and sleek trading experience. The result is that current platforms mainly attract long-term investors and miss out on groups such as day-traders and short-term traders. DefiSpot aims to build a platform that is accommodating for these underserved groups.
How the DefiSpot platform works
DefiSpot leverages THORChain (TC) technology to enable native (N) cross-chain activities via a network of nodes and LPs built with Tendermint and the Cosmos SDK.
Let’s say a user wants to swap their BTC (N) on the Bitcoin network to ETH (N) on the Ethereum network. The user sends a standard transaction to the Bitcoin vault — an address controlled by the TC network. Nodes will monitor the vault addresses to recognize new transactions. Each one of these nodes consists of many different components. The components are the TC blockchain, nodes for each connected blockchain (BTC, ETH, DOGE, etc.), and Bifröst.
The Bifröst Protocol is a connective layer or “bridge” between the TC network and other networks (BTC, ETH, DOGE, etc.). The function of Bifröst is to watch the vault addresses to find inbound transactions that are later converted into THORChain witness transactions. The witness transactions are initially recorded as “pending,” which is one of the states in the TC state machine. After most nodes agree on the state of the inbound transaction, the transaction moves to the «finalized» state. At that point, the user’s BTC deposit is recorded on the TC blockchain.
Next, the second phase of the swap will start — sending ETH back to the user. Once a new inbound transaction is finalized, the protocol initiates a swap.The swap is recorded on TC, and the Bifröst is called once again to initiate a withdrawal of ETH from the Ether outbound vault. This outbound transaction is translated from TC internal representation into a valid transaction for the destination chain using the respective chain client (in this case, the Ethereum client) and broadcasted to the respective network. At this state, the swap is complete, and the user receives their funds in their non-custodial wallet.
Key features of DefiSpot
- Eliminating counterparty risk. DefiSpot is non-custodial, so users do not have to send cryptocurrencies to the exchange. Our exchange is unlike centralized exchanges, as users do not have to send their assets to internal ledgers to manage their assets.
- No regulatory risk. Centralized exchanges are subject to local regulations even if they serve a global user base. Local governments can force exchanges to delist assets. For a recent example, Coinbase, Kraken, and Gemini delisted the Ripple (XRP) token. Regulators may also shut down exchanges and seize assets (a particularly big problem in South Korea).
- Neutral UI/UX. DefiSpot is a neutrally branded platform, meaning we are free from bias toward any specific network or community. We chose this angle because all current cross-chain exchanges are branded towards a specific niche. We wish to remove these in-group barriers by building an intuitive and unbiased interface.
Defispot Technology Components
Below we will describe the underlying technology of the Defispot interface and briefly introduce how it will be deployed.
Cross-chain Liquidity Pools
Our cross-chain liquidity pools allow users to manage assets with reasonable prices, transparency, and zero reliance on centralized third parties. Continuous Liquidity pools (CLP) democratize arbitrage opportunities while also fairly capturing fees for LPs.
Our synthetic assets are primitives for higher-order financial features, as well as fully-secured, fully-backed synthetic assets that users can send anywhere in the Cosmos IBC ecosystem. These synthetic assets will always retain the guarantee of being redeemable for the underlying asset.
Composite assets are comprised of multi-asset pools containing curated synthetic assets. Liquidity tokens issued when a user adds liquidity becomes the composite assets since they retain redemption power at all times.
The Defispot Token ($SPOT)
The Defispot Token ($SPOT) is the core utility token of the platform. The token functions are for liquidity-providing in pools, rewards distribution, and governance.
NOTE: We plan to release a much more detailed article about the components described above for an in-depth understanding of the project and its components
Defispot is an open-source endeavour
DefiSpot will be fully open-source. The code is currently under development and will be published on GitHub.
Defispot is a decentralized cross-chain liquidity exchange for digital assets. The project’s main focus is to bring traditional UI/UX into the DeFi space — A DEX dressed as a CEX. We provide users the ability to trade in a permissionless environment free from KYC.
Want to learn more?
Visit our Discord or check out our Telegram group.