For 2023, we (Colorful Notion, developers of polkaholic.io) are going to try redoing polkaholic.io by combining polkadot.js apps with Polkaholic APIs (or other third party APIs, on par with polkadot.js apps block explorer links). In particular, we would like to model Statemine/Statemint DEX pools/swap alongside other Parachain DEXs in the Substrate ecosystem, having sort of tried it across a bunch of defi parachains this fall. Key subgoals relating to Statemine vs Parachain DEXes:
- develop a XCM Global Asset Registry with “MultiLocation” at the center – see here – plug: if you are in the middle of this messy MultiLocation registry soup and/or want to sponsor this, please volunteer or who should contribute from your team in 2023 via this repo!
- develop an “API plugin” architecture where DEXes (pools, routers) can be uniformly modeled with MultiLocation-centric APIs; here, the goal is to have “routers” or parachain DEX modeled uniformly; for example, Statemint new dex pallet would have a trivial way to get the answer to "if I put X of
MultiLocation { parents: 1, interior: X1(Parachain(2004)) }, how much Y of `MultiLocation { parents: 1, interior: X1(Parachain(2000)) } do I get out … and ALL Parachains DEX models would have the same output - using (2), aggregating swap opportunities together and executing on the “best swap” on parallel presented
- furthermore, trying to get parachains to model themselves well
We believe this means that 2023 will see 4 categories
(A) Parachain DEXes
(B) Users of Parachain DEXes – swappers, liquidity providers, …
(C) [NEW] Statemine/Statemint DEX who are notably different than (A) in NOT being as transaction fee driven for their own survival and have no deep sibling rivalry / competition for users/TVL/liquidity
(D) [NEW] DEX Aggregators (and DEX Aggregator Aggregators, DAOs that maximize your yield, etc.) in dapps like 1inch or wallets akin to Metamask swap fees
Assuming
(A) becomes healthy by virtue of sufficient { USDC/USDT/ETH/… onboarding with execution on Circle + Snowfork, adequate LP incentives, } via (C)
then short-term
(D) needs a Polkadot equivalent of 1inch/Metamask swap fee earning mechanism, since it’s clear that (A) doesn’t really want to be aggregated in (2) … right?
I believe buyer’s agent (C) + (D) “front-ends” naturally belong together “in front of” all the seller’s agent (A) “front-ends” in a nice trusted place like polkadot.js apps or wallets (augmented with APIs until everything can be done with RPCs), made suitably multi-chain. We could imagine that if you do most of your DEX activity in one specific parachain (A) (because it specializes in X, or has the best fees model), and that specific parachain ALSO shows you the same thing as (C)+(D), you just stick with that parachain. There are no parachain dapps that have DEX aggregator qualities (or are there?) now, but the end game could be that the devil will be in the details of how much DEX fees are relative to XCM fees, and where your assets are exactly.
What is the fee earning mechanism that would support DEX Aggregators?