How do perpetual DEXs innovate DeFi?
In this Twitter space, host Coinhall speaks with Fishmarketacademy, Grover, Dead Right Dove, Cooper, Ivan Poon and TendermintTimmy to discuss perp DEXs on Cosmos.
Read our notes below to learn more
Fishmarketacademy’s background
Biz dev at Carbon.
Carbon is an L2 side-chain using the Cosmos SDK via IBC enabled.
Demex is the protocol that is laid on the chain and built specifically to support advanced DeFi from trading, options to futures.
Grover’s background
Working on a perps DEX called Vortex which is a fully onchain peer-to-peer perps exchange that is live on testnet.
Dead Right Dove’s background
Working at Kujira, a platform for DeFi protocols.
Everything Kujira does is geared towards creating a full ecosystem where financial services can thrive on the blockchain for all the good reasons.
Cooper’s background
Recently joined the team contributing to Helix, a perpetual exchange built on top of Injective infrastructure.
Why use a perpetual DEX instead of CEX
Nobody knows what’s going on behind the scenes of centralized exchanges.
99% of all perps happen on CEX and only 1% is onchain.
Connecting to as many chains as possible so people can trade all kinds of assets.
Building on Cosmos SDK enables all chains to be a bit more optimized for trading.
Not having to worry if a user can withdraw assets or not because everything is done onchain.
Solving user experience of fiat on ramps.
There is transparency unlike centralized platforms.
Providing an environment for users to self custody.
Kujira’s approach on perps
Decided to go to a solution that provides good trading experience.
Created an automated market making service that also allows anybody at any time to incentivize a pool with any assets.
The goal is to become sustainable just from the trading APRs.
Demex utility
A hybrid dex is basically one that takes the AMM and spreads the liquidity across the order book.
Have professional market makers quoting orders.
Benefits of Helix and Injective
Builders can come and build directly on top of that liquidity and not necessarily have to worry about that cold start liquidity issue to provide towards users.
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Thoughts on perps solution
Collaborate on a solution where sequencing orders is not needed, there’s just a need to distribute orders which is actually a much more efficient operation.
Fairness in terms of distribution as well as price.
Vortex has 22,000 transactions per second on testnet and block time of around 600 milliseconds.
The end point for DeFi is for price discovery to happen onchain and in order for that to be possible, it needs superior blockchains, block times and efficiency.
Price Oracles and APIs
Used the tarot, works the same like local Oracle feeds.
Validators will come to consensus of what the correct price should be for a particular feed.
Uniswap is working on stuff around historical pricing.
Looking at new forms of listings and how accurate to display the data in real time to ensure the best experience onchain.
No matter what external price feed comes in, it's the validator set that uses the final conclusion.
Oracle solutions today are insufficient and not customizable enough.
Thoughts on liquidity
The solution for liquidations is to allow a fully transparent handling of the liquidation.
Injective incentivizes market makers to passively provide resting orders on the order book based on a price bias.
Q&A
Q: Will there be non-cryptocurrency assets or just full on IBC assets in crypto?
Cooper
There’s big things that will come from Helix the next upcoming days.
Grover
We make sure that each pair we list is going to be tradeable, liquid and interoperable things on Cosmos.
Dead Right Dove
Kujira aims to be a DeFi ecosystem. We are focused on bow, orca and minting of USK.
Q: How would the listing process work for a protocol that doesn’t have any tokens?
Ivan Poon
We use IBC native tokens as a pair and it depends on the community and the team what they want to use.
We are expecting a lot more conversions on what solutions we can develop to make things better.
We have permissionless listings.
Grover
It is something like an enterprise, where we can accept any tokens and let the community vote for what they want.
Fishmarketacademy
It would be cool if we have a Cosmos Hub DEX alliance where we negotiate market makers to provide liquidity to all of the DEX alliance and get discounts then set up relayers with each other.
Carbon is looking for more validators, reach out if you want to participate.
Check out these important links
TODAY’S EDITION IS BROUGHT TO YOU BY LEDGER STAX WALLET
Using a hardware wallet on the go is difficult and cumbersome - until now.
Ledger’s latest innovation, the Ledger Stax, is a credit card-sized hardware wallet complete with touchscreen and Bluetooth capabilities. Did we mention it’s designed by Tony Fadell, the creator of Apple’s original iPod?
Act now, click the link below and preorder the Ledger Stax.