Thread by @avaxholic

DEXALOT | BRINGING CEX TO ON-CHAIN

A thread 🧵 with insights about @dexalotcom - a revolutionary decentralized exchange aiming at bringing the traditional centralized exchange look and feel through a decentralized on-chain application.

#AvaxholicInsights #AVAXDT #CSSADT

1. WHAT IS DEXALOT?

@dexalotcom is a decentralized exchange (DEX) that uses central limit order book (CLOB). Its mission is to provide a truly inclusive and transparent environment where users can securely and efficiently trade cryptocurrencies with no slippage or custody risks.

2. PROBLEMS AND SOLUTIONS

#DEX #CEX #cryptocurrency #CryptoMarket

2.1/ Problems

The AMM model is being used a lot and plays an important role for #DeFi, but it doesn't optimize capital for users.

Disadvantages of AMM:
- High price slippage

- Creating a liquidity pool on the exchange is quite simple and easy for scammers to take advantage of. For example, using the same name and logo with the orginal project.
- Risk to liquidity providers (Impermanent loss)
- Vulnerable to Front-running risks from miners

2.2/ Solutions

Orderbook helps users to have more options and easier to make transactions to their liking. When you look at an order book on an exchange, what you're really seeing is orders from lots of people with different goals and strategies.

Advantages of Order-book:
- Allow to buy exactly the price you want
- Optimal for determining market prices and placing large orders
- See market depth
- Eliminate bots as price
- Limiting the risk of Front-running

3. TEAM

Team members are individual puzzle pieces that work together to form a complete picture.
- Nihat Gurmen - Co-founder & CEO: specialised in Tech
- Cengiz Dingoglu - Co-founder & CEO: specialised in Finance
- Jonathan Ackerman - CMO: Marketing for Red-bull for 10+ years

4. DEXALOT - HOW IT WORKS

4.1/ The UI of @dexalotcom is the same as the usual order-book exchanges that we often trade today such as Binance, FTX,...

There will be 2 main components participating in Dexalot:

- Maker is the one who creates the limit-orders put into the order-book.
- Taker is a person who buys tokens, they can execute limit or market orders.

4.2/ Operation model

With 3 main steps:
(1) Maker creates transaction on Dexalot order-book.
(2) Taker will take this transaction from Maker (or Taker will buy or sell tokens according to Maker's condition).
(3) When matching orders with Maker, Taker will receive or sell tokens.

5. HIGHLIGHT - DEXALOT SUBNET

The two prerequisites for the project to build a successful order-book #DEX is fast and cheap transaction speed.

The @dexalotcom subnet allows the project to speed up transaction processing per second faster with the right to set its own gas fee.

6. HIGHLIGHT - PRICE DISCOVERY

6.1/ Problems: Currently, the price of tokens is being clearly manipulated right after the IDO listing, such as speed problems or validators using their powers to attack MEV.

6.2/ Solutions: Dexalot Discovery will create a more orderly and fair playing field:
- Support to place limit orders to avoid slippage when the market is FOMO
- Stop Bots and MEVs that are sabotaging users during launch.
- Allow users plenty of time to enter and execute orders

7. HIGHLIGHT - DEXALOT MARKET MAKER CONTEST

CLOB does not need liquidity pools, instead, order books are populated by users who want to trade at different levels, usually by market makers.

So @dexalotcom organized a contest to encourage and find market makers from the community to increase liquidity for the platform.

8. FUNDRAISING

@dexalotcom raised $7M in a Private Round Led by Avalanche's @BlizzardFund with an Initial Valuation of $60M. This is the first project to receive funding from the Blizzard Foundation.
- IDO price: $0.6
- Private sale: $0.5

9. DEXALOT TOKENOMICS

Total Supply: 100,000,000 $ALOT

Looking at the tokenomics design, it can be seen that Dexalot is a long-term project when the team's token is vested for up to 4 years.

10. HOW DEXALOT CAPTURES VALUE FOR $ALOT

$ALOT has a project that applies a lot of use cases, thereby increasing the demand for using and owning it, specifically:
- Governance
- Gas fees for @dexalotcom subnet
- Staking
- Incentives

11. CONCLUSION

11.1/ Potential:
When the market is getting bigger and bigger, the liquidity of tokens is increased, Order-book will promote its advantages.

All orders are subject to network fees, which will significantly reduce fake orders on the order book.

=> This will make the market more transparent
and fair.

11.2/ Challenges:

A cross-chain bridge must be used to transfer tokens to the subnet, which increases the cost and risk of hacking for users.

Liquidity is the most difficult problem when the project is not large enough when there are still not many users using #DeFi.

Discuss here: t.me/avaxholic_chat