TAKING THE HEADACHE OUT OF TRADING; Interview with Jean, Co-founder of MCDEX
It’s unimaginable to carry out blockchain transactions without the fear of either delay in confirmation time, or significantly high gas fees. MCDEX is a company that has successfully built a solution around this problem for traders.
With MCDEX, you can save up to 100x on gas fees and enjoy instant confirmation of transactions.
In this interview, we have the pleasure of talking to Jean, co-founder of MCDEX. MCDEX is reputed to be the world’s top market liquidity platform and the first fully-permissionless DEX for trading perpetual contracts.
Eleonora Etinger:
Let’s know a bit about you and the MCDEX ecosystem?
Jean:
I'm Jean, the Co-founder of MCDEX. MCDEX is a decentralised perpetual swap protocol. It did not exist until two years ago.
Initially our team was doing professional mining. On my part, I was trading derivatives contracts with several companies.
MCDEX was built based on the discoveries from our practice, and the observation of trading fears. In the process of building, we learnt about Smart Contracts. Realising its power and importance in the blockchain, we noted it could solve the trust issue.
Subsequently, we decided to develop a Defi protocol, which works the same as a Smart Contract. We reckoned that we wanted a product that users can understand easily.
While we were learning and practising, we concluded that perpetual swap has a strong, good product-market fit, as it is the most popular product in CFI. This was how we started two years ago.
Eleonora Etinger:
Can you highlight the main challenges MCDEX faced and what has been put in place to ensure market liquidity?
Jean:
MCDEX has top market liquidity, ensuring traders can trade with up to 15× leverage. Our top market liquidity was achieved by our V3 AMM, which is the automatic marketing maker.
Our analysis has shown that V3 AMM is 1000 times more capital efficient than the constant product formula of AMM. V3 AMM uses a price function near the index price. It also uses a risk control function to adjust the spread and slippage. Additionally, it shares the margin between perpetual to further improve capital efficiency. The latest AMM product in our structure provides a funding rate and adjusts to premiums and discounts.
Altogether, these pricing systems improve capital efficiency, allowing traders to enjoy better user experiences.
Eleonora Etinger:
Our readers who are traders would like to try your platform. Could you shed light on why you decided to integrate the ARBITRUM solution? What are the main features you look for in blockchain?
Jean:
Yes. There are three reasons why we decided to launch on ARBITRUM. The first reason is the on-chain cost. Users care more about gas. ARBITRUM is a multi-round interactive robot. It has a lower cost than a single round interactive robot.
The second reason is developer friendliness. ARBITRUM is EVM compatible, which means that we don’t need to rewrite a single line of code when we deploy it. This is something that saves cost for us.
The third reason is the sequencer model. It is a new feature of ARBITRUM. The Sequencer model allows its users to quickly confirm their transaction status directly, and they do not have to wait for the transaction to transfer to layer one. So basically the sequencer model helps increase the liquidation efficiency.
We have chosen the ARBITRUM because of its low gas fee, developer-friendliness, and sequencer model which increases confirmation speed and makes the liquidation efficient.
Eleonora Etinger:
Sounds like a win-win. You’ve launched the V3 protocol. Can you elaborate on it?
Jean:
Sure. It is designed by our AMM base as a decentralized perpetual swap protocol. A perpetual swap is one of the most popular derivatives with no expiration date. It supports modern trading, which allows using leverage to trade, and its price trades close to the underlying reference Index Price.
The V3 protocol also provides a decentralized way of trading perpetual. Some of its key features are:
- Top market liquidity.
- Permissionless. This means anyone can create any perpetual market on our V3 protocol.
- Composability. We are building on EVM composable infras, so other smart contracts can easily be built to expand user scenarios on our protocol.
Eleonora Etinger:
Could you share a few competitive advantages you find the most relevant?
Jean:
MCDEX is the only platform that allows permission for decentralization.
We provide liquidity because traders care most about it. They pay for it. Liquidity relies on the capital efficiency of AMM. Our V3 AMM function has a thousand times better efficiency than the constant product formula. I believe that this is something that differentiates us from our competitors.
Eleonora Etinger:
That sounds exciting. Some of our readers might want to become shareholders of MCDEX, no doubt about it. What can you tell me about the usefulness and the main advantages of becoming a shareholder?
Jean:
Our native token is called MCB, and it is a government token. You get to govern how to use the funds in our MCDEX protocol with the government token. The value of MCB is generated by our protocol and that is mostly the transaction fee.
We are putting efforts to increase our token utilities.
Eleonora Etinger:
Noted. What do you think are the main values or benefits traders seek in an exchange? Is it safe to say that MCDEX satisfies their needs?
Jean:
That’s a good question. I have talked with many traders, and I have found that there are two major things they care about: low trading cost and the market they have an interest in trading.
Traders seek low transaction fees. Our transaction fee is quite similar to those of centralised exchanges.
Traders care about a marketplace that interests them. Trending markets win this category. At MCDEX, we have full permission as our key feature, because we believe in empowering the whole community to generate more diversified markets.
We try to meet these two needs.
Eleonora Etinger:
We have talked a lot about the benefits for traders and how MCDEX satisfies their needs. But do you think MCDEX might be interested in a mainstream audience? Do you target regular users, or do you target only traders-oriented audiences? If you do target the mainstream, what are the main challenges you face?
Jean:
One of the challenges for decentralized exchanges right now is user adoption. Currently, the volume of users on decentralized perpetual swaps is much smaller than that of centralized exchanges. Mass adoption is the challenge we are facing right now.
For MCDEX, I don’t think we need large amounts of liquidity with the current model. Yes, we would like to handle a large number of users, but there has to be a spike in growth in the DeFi sector and user adoption. We are working on several areas to achieve adoption.
We are also trying to simplify our user experience. We have an ecosystem partner who does copy trading. Users who don’t know how to trade can deposit their assets in the smart contract, while the other party provides a trading strategy to use on MCDEX. This is one of the typical ways to lower the threshold and simplify user experience and onboard more traders.
Another direction we are working on is to expand the chains. We current are on Arbitron and BSC. We are actively expanding and talking with several other chain partners, for example, our launch Phantom mirror, to extend our protocol to more ecosystems, to generate more users.
Eleonora Etinger:
This is a strategic direction. Have you set any goals for the future and can you highlight some key points of your roadmap?
Jean:
Yeah, we have. We are looking forward to adopting a multi-chain approach and deploying it on other EVM compatible chains. We are building it right now.
We are actively talking with several partners that could help us expand the diversified-market markets on our platform.
Additionally, we are working on our next version with new features to solve some of the problems we are observing with our current operating version. These are some things that we are having on the roadmap.
Eleonora Etinger:
Awesome. Moving on, can you tell me about the innovations you are most excited about?
Jean:
I would say Trust. Without Defi, without the smart contract for two parties, especially if they don’t know each other or until there is a third party, there are a lot of risks.
The smart contract has everything written on the code, so you don’t need to trust anyone. You just need to trust the code to solve the problem for both parties. This is the initial reason why we dived into the Defi space. I still believe that this is the most exciting innovation for Defi.
Eleonora Etinger:
Exciting. One more question, what is the one problem you’d like to solve in the crypto industry?
Jean:
It would be the entry barrier. Although I see the promise of crypto, I don’t think there are many users in the cryptocurrency industry yet. The main reasons are that it’s a new concept and is perceived as hard.
At the initial stage of studying it, it can prove quite difficult for many to understand. I strongly believe entry will not be a challenge soon. It’s a gradual process that has started.
Eleonora Etinger:
That’s an insightful response! At Indacoin we stand for mass adoption too. It’s been a pleasure having this conversation. Thank you for your time!
Jean:
Same here. Thank you.
