De-Fi on NEAR Protocol: A Guided Order Book Dex Tour
Amid the exciting growth we’re seeing in the NEAR ecosystem, the DeFi landscape is expanding and innovation is moving at a rapid clip. That leads to a welcome expansion of utility for those seeking DeFi solutions on NEAR, but the depth and variety of what’s available, as well as not-infrequent updates to features on existing platforms, can make finding exactly what you’re looking for a research-intensive process.
In recent months, we’ve seen a number of dApps on NEAR introduce order book-based transactions. While order book functionality is traditionally associated with centralized banking and traditional finance models, its return is a trend playing out across the wider DeFi ecosystem as more and more users seek increased levels of control and customization for complex trading and transactions.
In this “De-Fi on NEAR Protocol” Guide, we will walk you through four options for Order Book DEX in the NEAR ecosystem: Spin.fi, Fusotao, Dodo, and Onomy. You’ll find more information about a number of the DeFi applications below in recent NEAR Week coverage, including A Guided Dexs Tour. In this overview, we will focus specifically on the order book functionality of each, key features, and additional resources to help you DYOR on your NEAR DeFi journey.
Order Book DeFi built on NEAR and Aurora
Spin.fi: On-chain order book solution for derivative products on NEAR Protocol
What is Spin? Spin is a decentralized platform for trading derivatives on-chain with the control, customization, and security that order book tooling makes possible. Built on NEAR through a partnership announced in October 2021, Spin offers users flexible liquidity, the transparency of on-chain verification, the ability to submit orders specifying the size of a trade, price range, and directional future of a crypto asset.
Think of it like: DeFi spot trading with a centralized exchange user experience.
The value proposition: Spin markets itself as a true DeFi platform with the advantages of centralized finance. While the automated market maker (AMM) model has dominated the DeFi landscape since the summer of 2020, proponents of the order book — a mainstay of CeFi — argue it not only allows for increased control and specificity of over-complicated transactions, but it also prevents the AMM’s inherent pitfalls: problems such as slippage, frontrunning and sandwiching attacks. Now in its Alpha stage, Spin is aiming to appeal widen DeFi adoption among institutional and retail investors seeking the benefits of centralized exchanges reimagined for the DeFi landscape.
What you can do: Starting with its Spot (now in Alpha) protocol, Spin’s first offering allows order book-based trading for NEAR/USDC, PARAS/USDC and SKYWARD/USDC. Looking ahead, Spin documentation outlines additional upcoming features for derivatives trading, including perpetual and quarterly futures, power perpetuals, floor perpetuals, options, exotic options, everlasting options, options vaults, basis trading, fixed yield, structured products, and RFQ.
DYOR: Spin.fi documentation
Fusotao: Verification protocol for order book-based matching systems on IBC-enabled blockchains
What is Fusotao? Fusotao is a Substrate-based application chain designed to offer verification for order book-based DeFi transactions using its “execute off-chain, verify on-chain” approach.
Think of it like: a CeFi-DeFi hybrid update to the order book system that merges the upside of centralized finance’s off-chain execution (faster, cheaper transactions) with the security and transparency blockchain makes possible.
Value proposition: Fusotao aims to create a best of both worlds scenario, where DeFi users get the advantages of the CeFi’s order book match-making (high levels of control, customization for complex transactions) without ceding control of their assets to a centralized financial institution or incurring common AMM problems such as slow transactions, high gas fees and slippage. Recipients of a NEAR Foundation grant announced in January 2022, Fusotao uses an off-chain component called Galois to execute and approve transactions before verifying them on-chain. The team is building in collaboration with the Octopus Network in order to create cross-chain interoperability with any blockchain compatible with the Inter-Blockchain Communication protocol set forth by Cosmos.
What you can do: Right now, the protocol’s testnet allows staking through its native token, but plans are underway to roll out community features, including governance tokens and rewards.
DYOR: Fusotao
Dodo: A DEX and aggregator whose Proactive Market Making (PMM) product brings professional market making capabilities to Aurora
What is Dodo? Dodo is a DeFi liquidity trading protocol that allows users to trade assets across chains through a variety of solutions and products, including creating custom tokens and liquidity pools, liquidity mining and fractionalizing your NFTs. While Dodo’s features are extensive, our focus in this guide is its Proactive Market Making (PMM) product, which allows individual and institutional investors to dynamically set and adjust parameters in their own liquidity pools in order to customize and control their market making strategies.
Think of it like: a product that makes it possible for DeFi investors to carry out professional market-making strategies in ways previously only available in centralized finance.
The value proposition: While AMMs gained popularity over the last two years for their ability to offer permissionless, decentralized transactions, their inherently automated nature does not allow for the control, customization, and experimentation an increasing number of investors are looking for as DeFi matures and gains wider adoption. Dodo’s PMM product seeks to bridge the gap between a true order book system, which requires a matchmaking mechanism, and the AMM by allowing users to define, set, change and update parameters governing the liquidity in their pools.
What you can do: As previously mentioned, Dodo allows users to do numerous things (exchange, create tokens, stake, earn rewards, fractionalize NFTs). When it comes to order book functionality in particular, it’s PMM product makes it possible for those seeking the flexibility and customizability available to CeFi professional market makers in DeFi by creating private pools and configuring them according to specific parameters and settings, including transaction commission rates, curve slippage factor, and adjustment to the pool’s capital size.
These modifications then dynamically trigger smart contracts that enable on-chain marketing making.
DYOR: DODO
Cross-chain order book DeFi with NEAR compatibility
While the order book DEX options above are built on NEAR or Aurora, its Layer 2 Ethereum Virtual Machine (EVM), there are also IBC-enabled protocols built on other chains that are compatible with NEAR. Here’s a quick look at one: Onomoy Protocol.
Onomy Protocol is a hybrid decentralized exchange combining an AMM system in its liquidity pools alongside order book functionality that allows users to establish trading parameters for stop losses, limit orders and conditional orders.
Built on Cosmos, the protocol’s hybrid system works by allowing automated swapping of matched assets in its liquidity pools, while also offering users the ability to specify parameters for when and under what circumstances they want to make trades. For example, a trader could use the stop loss feature to prevent overnight losses from unforeseen volatility.
DYOR: Onomy documentation
