Data in Action: Custom Data Solutions Powering DEX Backends
Recently, the PARSIQ team had the privilege of hosting a Twitter Spaces with Evgeny Lyandres, VirtuSwap Founder, and Alex Zaidelson, Head of Business & Data at VirtuSwap. For those who haven’t yet taken a listen, it is an informative hour of insight into the VirtuSwap platform, and as well, how PARSIQ is providing data driven solutions to meet VirtuSwap’s daily needs. Other insights into the state of the industry, the future of blockchain and blockchain data, can also be found in this virtual cast!
Introducing VirtuSwap
At its core, VirtuSwap is a decentralized exchange (DEX) built on EVM technology. The solution will first launch on Polygon and later on zkEVM and other blockchains. The DEX features state-of-the-art financial engineering combined with AI governance, and provides its users with lower trading costs (up to 50% compared to existing DEXs), and gives its liquidity providers up to 5 times higher returns on liquidity.
The goal at the outset of building VirtuSwap was to provide a significantly more efficient DEX than existing solutions. For the founding team, such efficiencies meant finding a way to offer lower trading costs to the end user, while also providing higher returns to liquidity providers. While plenty of DEXes exist today, VirtuSwap aims to target the segment of the market which has been largely neglected by current DEX players (e.g. Uniswap, Curve). These include the swapping of assets which regularly fall outside the Top 5 in terms of swaps (e.g. ETH, WETH, WBTC, and various stablecoins).
By targeting less popular assets (which, combined, make up about 20% of total DEX trading volume), VirtuSwap needed to bring two types of innovation to market:
- “Reserve Powered Virtual Pools” — a new pool architecture created by Virtuswap, designed to eliminate inefficiencies and redundant costs associated with indirect trades. VirtuSwap architecture raises capital efficiency, lowers pool imbalances, and effectively creates an environment where Virtuswap liquidity pools behave like an orchestra — working together to share liquidity, with each pool serving multiple trading pairs
- AI Governance System (codenamed Minerva) — a proprietary methodology developed by Virtuswap which is designed to constantly analyze trading activity (e.g. of trading volume, pool fees, or otherwise). Based on the analysis, Minerva finds the optimal way to distribute liquidity between the VirtuSwap pools in order to reach maximum trading volume and thus drive up the profitability for the platform’s LPs.
VirtuSwap’s Data Needs
Given VirtuSwap’s business model, it comes as no surprise that this novel platform required a significant amount of on-chain data, arriving in real-time, with low latencies, and delivered in just the way that its systems could consume it.
More specifically, VirtuSwap needed data which provided its solution with information to know the state of the blockchain at any given moment. Beyond this, VirtuSwap also needed to know the states of all its pools, in a very detailed fashion.
Consistently requesting such information from the blockchain would be incredibly expensive and resource intensive, something the team wanted to avoid. Simply put, VirtuSwap needed a better solution, such that this information could be provided in the easiest way possible.
PARSIQ Provides the Way
Before PARSIQ, the VirtuSwap team had tried other vanilla providers — solutions made available by well-known Web3 data players. Despite their brand names, the VirtuSwap team regularly encountered two main deficiencies:
- Data was provided in raw format — which required additional work from VirtuSwap to get it into a state that they could then use
- Speed of access and affordability in cost — when compared to what the team needed for these requirements, it simply wasn’t meeting their standard
PARSIQ’s solutions offer differentiators which provide powerful alternatives to what other vanilla providers can supply. PARSIQ has built in-house software which is embedded into our own nodes, which then allows us to provide richer raw data and do modifications to that data — like ABI decoding. Furthermore, PARSIQ has been focusing on developing vertically rather than horizontally — thereby providing a richer and more comprehensive experience versus others who are focused on increasing the number of blockchains supported.
With this, PARSIQ’s Tsunami API and its ABI decoder were able to offer VirtuSwap exactly what they needed to power the data needs required to optimize liquidity pool experiences for its users and LPs. To boot, PARSIQ’s latencies, low-cost structure, and customer support were also what the DEX needed to get its operations up and running.
Conclusion
We are excited for all that VirtuSwap has to offer to its customer base. The platform aims to launch later in May — however, Testnet is already live. For those who seek a lower cost trading experience, and/or higher returns as a liquidity provider, we invite you to learn more about VirtuSwap, and their advanced technologies and product.
Excited to extract data from the blockchain? So are we! For more information on the Tsunami API and custom Data Lakes, reach out to bdteam@parsiq.net.
To check out everything that the Tsunami API can do — check out our docs here. Make sure to bookmark and visit regularly for updates!
