Road to Liquidity
Access all decentralized liquidity pools and more
In this second post, we present the dex.blue liquidity strategy.
In the current crypto exchange landscape, DEXes account for less than 1% of total crypto trading volume. Besides obvious challenges in terms of usability and private key management, trading on a DEX today is plagued by large spreads, slippage and unfilled orders.
Lack of liquidity is without doubt the main roadblock to broader DEX adoption.
To understand how dex.blue plans to tackle the DEX liquidity problem, let’s take a step back and analyse how liquidity in crypto evolved throughout time and how we are paving the way for what’s next.
Yesterday, Custodial Liquidity Pools
Before the rise of DeFi protocols and DEXes in the past year, most of Ethereum-based assets were either held in user-managed wallets or in centralized exchange wallets. The only reason for a user to move their funds from their own wallets into the centralized exchange pool was clear: gain trading utility. But doing so comes at a cost, losing self-custody of your funds .
With no other trading venue available, supply and demand pooled among a handful of centralized exchanges that are still the biggest marketplaces in crypto today. These liquidity pools are custodial by design, permissioned and hardly auditable or connected to one another.
Today, Decentralized Liquidity Pools
On the other hand DEXes core promise is to deliver a Pareto improvement over the existing trade-off: maintaining self-custody but enable trading. And given the growing usage and volume of DEXes in the past year (particularly driven by AMMs such as Uniswap and Kyber in addition to Eth2Dai, 0x), the promise is slowly turning into actual on-chain activity and ever growing, decentralized liquidity pools.
The premises for these new liquidity pools however couldn’t be any more different: this new, smart-contract powered liquidity is non-custodial in nature, auditable and composible. No centralized entity can monopolise it and permissionless building allows for connected liquidity and more utility to be created around these pools.
However, despite these ambitious premises, DEX usage only accounts for 8 - 10 million $ daily trading volume which is a rounding error compared to the ~50 billion $ on centralized exchanges (Sources: Coingecko & Bloxy DEX Analytics).
Tomorrow, dex.blue Road to Liquidity
But is it possible to leverage these decentralized liquidity pools to offer an improved non-custodial trading experience?
dex.blue aims to become the most liquid decentralized exchange. It integrates existing decentralized liquidity pools and add utility to them through our tools. dex.blue is not just an aggregator, but a decentralized liquidity pool on it’s own that integrates and enhances existing liquidity.
Offering the most advanced and competitive platform to crypto traders at dex.blue means focusing on (i) offering access to all existing liquidity through one platform, (ii) creating a fair and performant marketplace with a fee schedule and maker rebates, and (iii) providing first class tools to advanced traders.
I. Access all decentralized liquidity
We integrates Uniswap, Kyber and Eth2Dai. This means that when you trade on dex.blue you get access to all available decentralized liquidity in one single platform with advanced tools.
It all happens seamlessly as you trade: regardless of whether your orders are executed internally or, for example, against Uniswap’s liquidity or even across multiple liquidity pools, you’ll always get the best price and lowest slippage available across all decentralized exchanges.
II. A fair and performant marketplace
Fostering fairness and designing for performance will ensure long term dex.blue sustainability, here is how:
- Low trading fees & market makers rebates
Our convenient fee schedule is lower than any DEX and maximises liquidity by offering 0% maker fees to everyone and even rebates to high volume traders. - Lower gas costs
Thanks to our GasToken implementation, trading on dex.blue is always cost effective, especially during times of high gas costs (e.g. settling an order with Uniswap for example, could be cheaper through dex.blue than with Uniswap itself!). - No race conditions and free order cancellation.
dex.blue’s hybrid architecture removes typical decentralized exchanges race conditions, guarantees settlement and enables free and instant order cancellation. - Advanced order types.
Beside Limit-, Market-, Hidden Orders and Stop-limit orders, traders have access to Immediate-or-cancel, Fill-or-kill, Post-only, Hidden and Fiat Pegged Orders.
III. First class tooling for advanced users
Since the beginning dex.blue infrastructure has been designed with algorithmic traders and advanced users in mind - developing and integrating is simple and well documented.
- Powerful APIs
Our WebSocket API enables fast user input confirmations and real time access to market data. Leverage our libraries in Go, Python, and JavaScript. - Delegated Signing
Develop your automated bot strategies safely by using Delegated Signing Keys. Keep your main private key safe and use the delegated keys for your bots.
There is no silver bullet to kickstart liquidity in a marketplace, but leveraging existing liquidity and increasing its utility opens the door to a truly liquid and performant decentralized exchange
If you haven’t already, visit our website and join thedex.blue Early Access programme. You will get an early sneak peak into the platform, trading fee rebates and more.
We are launching soon — stay tuned!
