What can be built based on TomoX (Part 2)

This article entails our previous article about the different layers of TomoX ecosystem. This article will walk you through the diversity of DeFi applications that have been built and will be built upon TomoX.

Part II. TomoX applications ecosystem

Spot trading

As the most basic functionality of any cryptocurrency exchanges, spot trading allows to trade. Unlike most existing exchanges (regardless of centralized or decentralized exchanges), TomoX allows trading on any token pair while the other exchanges limit the base token to mainstream crypto assets such as BTC, ETH, and USDT.

More on the cool features of Spot trading on TomoX can be found in our previous article.

P2P Lending

P2P lending is definitely one of the hottest applications in the DeFi crypto space. Classic P2P lending relies on third-parties, but DeFi-driven P2P lending applications eliminate the intermediary, reducing cost, time, and need to trust. Through the use of smart contracts and collateralized loans, the lender is provided trustless security to ensure the safety of the loaned assets.

TomoX P2P Lending is the flagship for efficient P2P lending built upon TomoX . TomoX P2P Lending can be enabled in one-click by any relayer owner.

TomoX P2P Lending is purely peer-to-peer and based on the decentralized matching engine of the underlying powerful TomoX protocol. Each lender and borrower creates their own loan orders with specified terms/duration and expected interest. If any pair of lender and borrower match, TomoX P2P Lending will automatically execute those orders to create a loan contract.

Furthermore, differently from most existing lending applications in the DeFi space where users need to constantly monitor their collateral value to avoid liquidation, TomoX P2P Lending has an advanced feature: Auto Top-up. As its name implies, it allows a borrower to allow the lending system to automatically put more collateral to the loan contract if the current collateral value drops down to some threshold. This is very useful for borrowers to avoid liquidation of their collaterals.

Interoperability

Interoperability is undoubtedly one of the most critical problems in blockchains and cryptocurrencies. It allows holders of an asset to move it from one blockchain to another blockchain, just like moving money from one bank to another bank in traditional finance.

Due to the inherent complexity and diversity of various consensus algorithms used in public blockchains, connecting all blockchains in this manner becomes a very hard problem.

TomoBridge — developed by TomoChain aims to mind the gap between different blockchains, allowing to transfer back-and-forth between TomoChain-issued crypto assets and tokens on mainstream blockchains such as Bitcoin and Ethereum.

TomoBridge acts as a secure bridge protocol/tool that provides liquidity for TomoX.

TomoBridge allows users to cross-chain transfer BTC, ETH and USDT to TomoChain. Wrapped tokens for those crypto-assets will be issued correspondingly to the transferred amount. Wrapped tokens are issued as TRC21 tokens so that the owners of those tokens can transfer them instantly, trade for other tokens, or even anonymize their tokens by using TomoChain’s privacy protocol, TomoP.

All the original crypto assets are securely locked in a scalable multi-signature wallet, that can only unlock these assets if the owner of the corresponding TRC21 tokens on the TomoChain blockchain requests an unlock request.

Wrapped tokens can not only be used for trading but also for all DeFi applications on TomoChain, which would eventually contribute to a rich ecosystem of DeFi applications with many crypto assets.

Market maker

Market makers can use TomoX’s TomoX-SDK to participate in creating a healthy and profitable trading ecosystem.

There are practically 3 reasons that incentivize a market maker:

• Create an order book market for a token: Imagine that a token issuer wants to create order books and create a market for the token. In this case, the token issuer would use TomoX-SDK to create market orders regardless of the fee structure to provide liquidity for the token.
• Independent market makers could work with token issuers to create trading volume for their issued tokens. In this sense, those market makers could be paid by the token issuers or could earn profit from the spread.
• A relayer could run a market maker to attract traders to trade on his relayer so that the relayer owner could earn profits from trading fees.

Oracle service

Cryptocurrency trading price is a very important component in cryptocurrency trading. Many centralized crypto exchanges publish a crypto price that developers use it as price feeds for DeFi applications on different blockchains.

While the price feed from those exchanges are managed in a centralized way and not transparent, TomoX can also act as a price feeder that basically takes prices from many different relayers. Moreover, all price data on TomoX are transparent and verifiable.

Price feeder can allow:

• price data to be shared with external applications outside of the TomoChain blockchain.
• smart contract-based DeFi applications to have a unified source of price data. This is very useful as many DeFi applications like trading, staking, swapping, derivative trading, and payment systems need to have price data.

Stable coin

The entire MakerDAO with DAI stable coin can be deployed onto TomoChain. MakerDAO on Ethereum has a centralized point of failure which is the price feeder that sends price data to the MakerDAO contract periodically.

The recent collateral liquidation of ETH in MakerDAO represented the greatest Vault loss in its history, valued at 35,000 ETH. The main reason is because the price feed transaction could not be processed on-time due to the network congestion, which drastically increased the transaction gas price.

This problem can be solved by TomoX as follows:

• TomoChain’s 2000 TPS network speed and near-zero gas fees can circumvent network congestion.
• On-chain price that can be checked every two seconds, as opposed to every minute on Ethereum.

Staking

TomoX P2P Lending allows crypto assets, either originally issued on TomoChain or wrapped tokens, to be locked into contracts as loans to be borrowed by others. In this sense, Lending can be thought of as another version of staking, as assets are locked away and interest is earned for doing so.

Derivative trading

Derivative trading is now very popular in centralized exchanges. However margin and derivative trading in decentralized exchanges has many limitations. Those are speed, market price source. Margin Trading Exchanges like dYdX or bZx either are based on oracle services to push price data points to the exchange smart contract system, or get price data points from another exchanges on Ethereum.
Recent hacks on bZx or liquidation of collaterals on MakerDAO show that the current margin trading on DEXs lacks a decentralized price feeder which is fast enough and should not depend on blockchain network congestion.
This is where TomoX shines. TomoX could close the gap, the index price could be obtained from TomoX, which allows derivative exchanges to check and match orders in real time, thus avoiding potential loss.

Conclusion

By concluding the series, we believe the future of DeFi applications is bright. With a networked relayers equipped with TomoX P2P lending as initial applications on TomoX, a range of financial applications based on TomoX will be built in near future to push further the adoption of TomoChain in the finance industry.