@axotrade - Redefining DeFi on Cardano
#Cardano has the superpower to parallelize transactions and fit thousands of transactions in one.
Dapps on Cardano have to be built to use this superpower, and #Axo is leading the charge.
#Cardano has the superpower to parallelize transactions and fit thousands of transactions in one.
Dapps on Cardano have to be built to use this superpower, and #Axo is leading the charge.
https://twitter.com/axotrade/status/1575065682915434497
We will talk about:
• How TradFi exchanges work?
• How DeFi DEXes work?
• How DeFi on Cardano works?
• How Axo hopes to change this?
• How TradFi exchanges work?
• How DeFi DEXes work?
• How DeFi on Cardano works?
• How Axo hopes to change this?
TradFi works on a classic buyer meets seller and things happen.
This is highly efficient as you get the exact quoted prices and minimal fees.
But it only works for highly liquid coins because you always need a buyer and seller, this is not the case for most #cryptocurrencies.
This is highly efficient as you get the exact quoted prices and minimal fees.
But it only works for highly liquid coins because you always need a buyer and seller, this is not the case for most #cryptocurrencies.
AMMs
AMM was born out of the need to make trading possible anytime without requiring matching buyer and seller.
Liquidity pools allow the pooling of assets used for trading or market-making.
This kickstarted #DeFi and provided a venue to trade thousands of tokens.
AMM was born out of the need to make trading possible anytime without requiring matching buyer and seller.
Liquidity pools allow the pooling of assets used for trading or market-making.
This kickstarted #DeFi and provided a venue to trade thousands of tokens.
AMMs come with their problems,
They are inefficient, as you need to lock up a lot of capital, or else you get a worse price creating slippage.
By design, liquidity provider sells their stronger token when it goes up and vice versa, creating a loss called impermanent loss.
They are inefficient, as you need to lock up a lot of capital, or else you get a worse price creating slippage.
By design, liquidity provider sells their stronger token when it goes up and vice versa, creating a loss called impermanent loss.
Cardano AMMs
In eUTXO, you can only touch the state of a #Dapp once every 20 seconds (too slow)
This is why transactions are batched in one to allow high throughput.
However, since batching is done off-chain. It could allow for censorship and MEV attacks.
In eUTXO, you can only touch the state of a #Dapp once every 20 seconds (too slow)
This is why transactions are batched in one to allow high throughput.
However, since batching is done off-chain. It could allow for censorship and MEV attacks.
Axo mechanism
Axo uses the eUTXO model efficiently, it creates an #NFT for each trade. These NFTs are secure Cardano native assets that can be programmed.
These programmable swaps can be consumed only when the exact order conditions are met, offering fair prices always.
Axo uses the eUTXO model efficiently, it creates an #NFT for each trade. These NFTs are secure Cardano native assets that can be programmed.
These programmable swaps can be consumed only when the exact order conditions are met, offering fair prices always.
Benefits:
Slippage and Impermanence Loss: Programmable swaps make a pool of orders, which means it doesn't suffer from high slippage and IL
Composable: They can be combined or divided, which allows for allowing complex transactions
Decentralized: No batchers required.
Slippage and Impermanence Loss: Programmable swaps make a pool of orders, which means it doesn't suffer from high slippage and IL
Composable: They can be combined or divided, which allows for allowing complex transactions
Decentralized: No batchers required.
Scalable: Axo trades are NFTs and can be traded parallelly unlike other Cardano DEXes with liquidity pools.
But the idea goes beyond dexes, it can be used to create a range of structured financial products like indexes, synthetics, or derivatives.
But the idea goes beyond dexes, it can be used to create a range of structured financial products like indexes, synthetics, or derivatives.
We are excited to see what Axo brings to Cardano, how about you?
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https://twitter.com/Cardano_Clan/status/1558121169332703241
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