Dualyti.xyz should be considered as model for a DEX
I don’t agree. The most useful metric for any exchange when a trader wants to know if they’ll get a good price is “order book depth” which in DeFi translates as TVL. Higher order book depth = lower spreads and more efficient trading. Volume is a measure of how much trading activity occurs, and is also a useful metric. The metrics you listed are also useful, but less useful than order book depth (TVL) and volume.
That is a straw man - I don’t believe I indicated which is/are the most “useful”.
But, whichever you believe it is, hold that in your mind.
Now imagine 2, or more, DEX that are practically indistinguishable in terms of that metric… you’ll have to break that tie.
A coin-toss/RNG is certainly one approach.
However, if you are a DEX operator, for purposes of discussion say @Ben, or anyone who engaged in his exercise (which takes time and effort), you’ll likely have other metrics you can use to attract users.
Now, which metric do you say is the most useful? The very first one you had in mind (which is as informative/useful, at best, as an unbiased RNG), or the 2nd, 3rd, etc. that attracted a user by breaking a tie for them?
Retraction:
From what I’ve just said, my previous remark hasn’t aged well 
Apologies @Ben you’re approach would tell me something about a DEX operator.
Nonetheless, I still stand by my opinion that Statemint could be more useful (operationalizing user preferences via a sweet UI/UX) as a DEX distributor:
I cannot speak for others, but I can certainly say for myself that I am in no way afraid of a statemine/t DEX making parachain protocols redundant.
I am, however concerned that to solve the general problem of “How do we improve the onboarding UX” we end up implementing something a bit crappy which only compounds the problem. Not much imagination is required to think of scenarios where the poorly-incentivised pools end up making users pay far in excess to accept and transfer TOKEN_A across statemint. If you follow that thread far enough, you end up with a narrative being that polkadot is an expensive ecosystem to transact.
Let’s get away from “fear is the mindkiller” counter-point, and instead discuss what an efficacious solution would look like and how it would work.
If there is a common good dex, cex or whatever hybrid aggregator structure allowing to bring liquidity and to make cheap and efficient xcm swaps, I don’t think it should be on StateminE/T. It should be governed by another independent common good parachain, only focused on this dex.
I think StateminE/T could be saturated with these transactions and its governance and therefore runtime has nothing to do with DeFi.
Every parachain sector (DeFI, SocialFi, GameFi, Creator Economy, etc.) could have its own Common Good nemesis. I don’t think it’s bad, it just needs to act as an architecture/base layer for Free Market Parachains.
This Common Good parachain could have its own council managed by existing dexes, allowing them to handle conflict of interests internally within this Cooperative structure.
In the real world, we already see some companies merging into a cooperative structure to handle conflict of interests and be more efficient. This way, Free Market parachains can still operate and use this Common Good architecture as a base architecture upon which they create incentives to bring liquidity and stability.
To learn more about cooperatives : Our history | ICA
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circa 1776:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
A. Smith
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Raising price of slots could only increase the quality of parachains imo. And “conspiracy” could not happen in a transparent decentralized system. Just depends on how power is balanced.
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I’m writing here to support the Statemint DEX as it’s the most exciting recent feature proposed by Parity, and it’s essential to the success of Polkadot. It’s also becoming apparent that it’s one of the most controversial recent topics in the Polkadot ecosystem.
As an ecosystem, we are way behind others in the development of mutually beneficial parachain-specific applications. Here are the main problems as I see them today:
- No native stablecoin outside of Statemint USDT, which as of now, is difficult to access.
- Over-reliance on questionably secured bridged assets instead of native assets.
- Lack of trusted DeFi infrastructure for DOT itself.
- There is no unified “xcDOT” and no design patterns are being followed; each parachain has its own version of xcDOT. This is not secure because if one parachain is exploited or fails in an unpredictable manner, it can affect their xcDOT and other parachains using assets from their parachain.
- There are very few incentives for whales, traders, and OTC desks to seriously use parachain DeFi due to difficult onboarding, questionable security, and lack of liquidity (e.g. the Acala aUSD accident)
- Integration with CEXs is too complex and expensive for initial listings of Parachain coins, and there is no decentralized alternative. There is no way to onboard into the ecosystem without centralized exchanges gating access. How can we even begin to think about building decentralized finance products if we are still dependent on centralized entities?
Out of all mentioned issues, the most fundamental problem that must be addressed immediately is onboarding into the ecosystem, especially for those who already hold DOT and USDT. There is no trusted, failproof way for a native DOT holder with limited technical skills to acquire any parachain native tokens that can allow them to interact with said parachains without exposing themselves to the risks of interacting with multiple parachains independently or going through a CEX. Due to the lack of secure and dependable DeFi options, every parachain coin being launched has to make an unfavorable agreement with a CEX to get listed, and even then, these trading pairs are not priced against DOT. This also results in many users keeping their portfolios on centralized exchanges, posing a major ecosystem-wide risk.
Statemint, as an agnostic public good parachain with its native assets like DOT and USDT, and the ability for parachain native fee asset issuance and trusted cross-parachain bridging, has a unique, non-competitive role in this ecosystem. Other parachains have resisted xcAsset standardization, which has led to fragmented liquidity that will not be solved unless we have truly ecosystem-wide consensus (unlikely) or rely on native assets that Statemint provides. We have the choice to slowly fail or accelerate the success of our ecosystem together.
In terms of concerns over the Statemint DEX competing with other DeFi applications or parachains in the ecosystem, the misunderstanding appears to be that the Statemint DEX would allow swaps of tokens different than only the single native fee token for each parachain, which is not the case.
Statemint DEX can be complimentary instead of competitive towards other dexes in the ecosystem in the following ways as I see it:
- The Statemint DEX can only allow swaps between parachain fee token assets, denominated in DOT or native USDT, and DOT <> USDT.
- Other DEXs in the ecosystem can aggregate liquidity from Statemint DEX to allow for the parachain-specific DEXs to offer even higher liquidity as if they were pooling the assets in a standalone manner.
- The Statemint dex doesn’t have to have any fancy features besides the simple swap, leaving room for DeFi innovation to other ecosystem projects.
- Unlike other parachains with a set lease term, Statemint is the most permanent parachain that offers the most long-term dependability as the home of a DEX of the most critical assets in the ecosystem.
Statemint, in particular the DEX, can benefit all other applications in the Polkadot ecosystem and positively co-exist with them, whether it’s onboarding new users, persisting legacy and para-time chain history, or forming a base layer of communication and compossibility. There are a lot of issues with Polkadot parachains that are holding back this ecosystem from growth. The proposed new roadmap solves many of these problems quite elegantly and is our best hope for the success of all projects in this ecosystem.
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It would indeed need to be “operated” though. To make a v2 style dex work, you’d need to supply millions of dollars in DOT incentives. You’d need to market it. Etc. If you don’t do those things, it’ll be outcompeted for liquidity by dexes on Polkadot’s parachains, of which there are many. You’ll be building Gravity Dex trying to compete with Osmosis.
I am not sure who was complaining that Polkadot doesn’t have a dex. Moonbeam alone has several, not to mention other “defi focused” parachains like Acala or Parallel. In fact, referring to Polkadot as an L1 is very off-putting, because the entire idea is to have a Layer 0 acting as an infrastructure layer.
If I’m interested in building a new app-chain and I’m trying to decide between Polkadot and Cosmos, Cosmos becomes the very easy choice if the alternative is a Layer 0 that might decide my product is a common good and compete against it.
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Point by point
- Polkadot’s defi ecosystem is new. We actually got native USDT fairly quickly, and native USDC and BUSD I’m given to understand are well on their way. On top of that, Mai is natively collateralized on Moonbeam. aUSD (recent issues notwithstanding) is natively collateralized on Acala, and I believe Astar has a CDP stablecoin as well.
At the moment USDT is difficult for users to onboard. However, this is being worked on. Parity I believe is working with Tether to increase their minting caps, and I can tell you that Stellaswap is working with another project to bring native Tether transfers to Moonbeam from Ethereum and elsewhere.
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The bridged asset issue is, again, simply a consequence of a young ecosystem and in a few months will likely no longer be an issue. I’ll further note that parachains use different bridges, and as a result the risks to Polkadot itself are diffused. Until we get native USDC, what bridge would you choose for Statemint?
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Polkadot is a Layer 0. It isn’t supposed to have DeFi infrastructure. That’s the point. Or is the concern here that DOT isn’t being used as a quote currency?
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Unified xcDOT isn’t a problem that can be solved by Statemint operating a Dex. That’s an engineering problem for Parity to figure out. Actually, unified xcDOT would be amazing and I’d love if that was a focus instead of this dex distraction. That said though, IBC is doing just fine without something like this, and the extra “hop” doesn’t seem like a dealbreaker.
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If the argument is “parachain defi is bad, let’s centralized things on Polkadot” doesn’t that undermine the thesis behind Polkadot? Why not just use Avalanche?
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There are onboarding options popping up all over that don’t rely on exchanges. Transak, Kado, loads of other businesses are catering to this exact need.
Like I’ve mentioned in another comment, look at when CosmosHub tried to stand up a Dex. It was a failure, delayed the release of core functionality by half a year, and undermined ATOM’s credibly neutral status.
Bridged assets issue is not a local phenomena, there are NO bridges anywhere that you can actually trust, the only good TSS implementation is a Binance repo which is done on the research from 2018 and that is ancient. The latest Fast TSS from 2021 no one is even attempting to transcode from the research papers.
So no, we don’t have bridges, no the young ecosystem has nothing to do with it, the problem is that people copy paste broken ideas, old repos and broken blueprints instead of innovating and following the developments of the scientific world.
No one can rationally believe that any person sane in their mind would ever use any EVM based parachain do do absolutely anything with more than 5 USD they got from their parents to buy a sandwich. I think the point everyone is making is for those that are serious about security and actually building base layers that are sound technologically and not a vaporware in the style of WANChain from 2018. We all know how all those copy pastas end already from the previous cycle.
Unless there is a Statemint DEX, and a single unified source of origin of all native assets there is literally Z E R O chances for any composability not to mention competing with ETH. Definitely we are also not going to compete by cloning their EVM lol when Gavin created Polkadot because he knew years ago Solidity that he HIMSELF created was never a solution. And now people are coming to his new creation and shilling their EVM parachains, and that’s the future of Polkadot… please don’t joke guys.
You are trying to be innovators, how about actually doing some research and creating something new instead of blocking people who actually are innovating. So sorry but that’s the hard truth, if you can’t step up then I am all in for parity to do their work for you.
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currently seeing alot of self-funded slots… is that decreasing quality by lowering barrier of entry… perhaps
I think it’s a good thing, and inevitable at this bear market stage we’re in. A low barrier to entry isn’t bad at all, not every project is going to have significant backing. I feel we should welcome as many projects as Polkadot has room for, and let the market sort out which have value.
I think Polkadot’s design kind of solves the low quality project issue on its own, just with a little time.
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Native assets are already created on Statemint. I don’t see your point there. Do you not trust xcm?
If your concerns are around copypasta and the EVM, why not support non-evm parachains? There are literally parachains that are just dexes. If statemint has a dex, where do the Polkadexes and Basilisks fit in?
there is nothing wrong with common good usecases. On the surface it might look like it’s a competition for parachains, but it really won’t be. The parachains will have to specialize over time, whether they like it or not.
The key value of parachains will be in other specialized verticals like costs structures (gas fees, MEV management), tooling like SDKs, frontend apps - trading, analytics, bootstrapping liquidity. I don’t believe the common good parachain can handle all these narrow verticals, and it even shouldn’t handle by definition of being “common good”
If the Statemine DEX is serving a lean usecase, going for onramp + stables, I support the development.
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Perhaps a technicality but common good chains are all governed the same way, by DOT holders via XCM, today from the relay chain and later likely from the same common good chain.
I wouldn’t worry about the overhead of governance and although DEX transactions could be more common than token related ones at this point the impact would be negligible, we are drowning in available blockspace all over the ecosystem, a separate DEX CGP would be a premature optimization and we wouldn’t be able to tackle the issue I’m excited about of making it easier to create sufficient assets since you can swap tokens atomically.
To give a real world use case, I’m currently working on a “Polkadot native” decentralized on&off-ramps system and created the utility token in Statemint, it’s meant to be an entry point for normal users to the ecosystem but not being a sufficient asset kinda defeats its purpose since users need DOT to get DOT, with the current system it will be difficult to convince governance it’s an asset worth of sufficiency as it’s not yet traded and has no price other than an estimate, it’s also not that simple to take an asset to other chains and bootstrap its ecosystem somewhere else(e.g. we failed a super majority referendum in Moonbeam to register the asset likely due to trolls) so it becomes a bit of a chicken-egg situation. With a more featurefull Satemint it will be easier to bootstrap many kinds of projects. It would also be an interesting pattern to see more projects starting there, I’d trust more assets with their reserve in Statemint than in a new chain with weak governance and less rigorous security practices that it’s easier to attack.
I’m surprised the DEX topic creates so much controversy, people argue like this kind of changes are going to be forever but like Shawn mentioned previously, something that’s the great thing about our governance and ability to do forkless upgrades is we can easily try things out and vote them out later if they don’t work.
This is an interesting idea and I’d like to see more on this topic. it’s a bit like privatization vs making things public, many governments suck at managing public services(i.e. due to corruption) and tend to give up control to the private sector(sometimes more than they should), other governments do pretty great managing things on their own. Polkadot is in its infancy and it’s still hard to tell what services are basic infrastructure and what is or what isn’t a CGP, we should be more daring with CGPs and try to do more things even if they end up competing with other projects.
Just like parachains compete with each other I see no issue introducing extra healthy competition against “government”(or co-op-like) managed services, it adds extra pressure to create real innovation and deliver great products, if Statemint ends up killing a few DEXes or NFT projects I’d say it’s a good thing, they simply weren’t useful enough.
Hopefully common good parachains can become more … common?(with enough care to not scare innovative capital). It’s my favorite Polkadot feature, being under the same governance system it’s easier to align them to accomplish greater more noble goals beyond profit maximization and VC pleasing, they can become a great vehicle for positive change and a way to escape the hypercapitalistic future the blockchain industry is heading, every day diverging more from its founding ideals.
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+1
That’s exactly how I see things. We’re part of a organic nation, implying all the natural laws related to it, including cannibalization, cooperation, and harmony.
CGPs are just means to achieve this end as architecture layers for everyone holding DOT/KSM - including Parachains as they conducted a crowdloand ans thus are - at least virtually - holding DOT/KSM for their slot. Exactly how states decide how your electric grid will be implemented, how water is supplied to your house or how you pay your bills (fees), just because you’re residency is located somewhere.
At some point, CGPs are needed to act as base layers, just like the relay is providing security to its parachains. In a sense, “providing security” could also be applied to streaming facilities, server providing and other common good usecases (including swaps). Could also be applied to hardware for PoW or even wallets.
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For those interested in engaging in a live conversation about this topic, @rphmeier will be hosting a twitter space:
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Hey guys, I am Victory Van from the Zenlink team.
I would also like to state our opinion. Zenlink should be one of the few dex teams in the Polkadot ecosystem that involves EVM and Substrate.
We’re not afraid of Parity running a dex and integrating it into Statemine/t because:
- If this is a reasonable request from the community, then Parity needs to make progress. This is the perspective of a Dotsama ecological participant.
- Competition is everywhere. Without Pariry Dex there will be something else. And as an experienced and professional dex operation team, writing secure code is the first step in operating a successful dex. This is the perspective of a dex builder.
- Volume and TVL are essential indicators for dex, but the source is equally important. We hope that Parity will make more improvements so that the outside world will pay more attention to the Dotsama ecology. If the entire Dotsama ecology cannot introduce more external resources (capital and users, etc.) and lacks bold innovations, the competition among ecological participants will be futile.
My advice:
- Parity can cooperate with some mature dex teams to get more suggestions, including code audit, UX considerations, etc.
- Parity can formulate the operating boundaries of parity dex to increase external confidence.
Finally, for someone who might be interested in Zenlink:
Zenlink has deployed dex smart contracts on EVMs on Moonbeam/Moonriver/Astar, and we have also deployed substrate pallets on Bifrost Kusama/Polkadot. We are now also working with several parachains to integrate Zenlink into them.
It is worth mentioning that we are not a parachain. Our original intention is to build a more flexible and changeable structure to help each parachain quickly have the basic capabilities of dex. Because we think that dex may be a basic requirement for each parachain ecology.
Welcome to our website. https://zenlink.pro/
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Just want to make sure I’ve got this right, innovation here is adding a fee-minimised y * x = k pool to statemine?
I think we have to agree to disagree here, because that has got to be one of the most copypasted potential solutions, despite this being an entirely novel problem.