Today’s largest decentralized exchanges (DEXs) powered by automated market making (AMM) — Uniswap, PancakeSwap — are an amazing leap forward in providing liquidity for decentralized finance (DeFi), but they’re missing something crucial that traders and market makers are looking for — order books. As opposed to AMM, where liquidity has to be provided to both sides of a liquidity pool and at a certain price, order books provide flexible, directional liquidity, allowing market makers to participate, and also allowing for advanced trading strategies. For DeFi eliminate CeFi (centralized finance), this revenue from centralized exchanges has to migrate to Defi.
Dexta will make that happen.
Binance Smart Chain (BSC)
Dexta will build on Binance Smart Chain (BSC) to create a fast, low cost user experience and also to capture a rapidly growing community that is migrating to BSC from Ethereum. However, BSC is only the beginning. We will expand to other chains through multi-chain compatibility by building on the Solana blockchain.
Dexta’s automated decentralized on-chain limit order books (Dexta Exchange) will allow users to submit orders with the freedom and control of a centralized exchange. This will bring all the aforementioned capabilities that are missing from traditional AMM DEXs to DeFi, which will then help migrate traders and market makers away from CeFi platforms.
Centralized exchanges provide leverage to their users, but do so through centralized ownership of funds and opaque processes. This opens unnecessary trust and security risks for the trader which have no relevance to the trade itself. Dexta will eliminate these risks by offering leverage on Dexta Exchange, a fully decentralized, on-chain protocol.
The amount of leverage available for a user will be based on the sum of the user’s deposits and positions. The collateral ratio is the sum of the user’s deposits and positions divided by their loans. To obtain leverage, a user will need to provide 130% of collateral, and will need to keep the ratio above 120% to avoid liquidation. If a user’s collateral ratio drops below 120%, the account will be liquidated. Liquidations can be claimed by any account. To ensure accuracy, account values will be calculated using a combination of Dexta protocol prices and price feeds provided by standard decentralized oracles. Reliance on oracles will be removed as the protocol develops.
Initially, a selection of tokens will be available for lending and borrowing through the order book. More token pools will be added as the platform develops, with the potential of allowing custom token pool creation.
Of course, running an order book on a blockchain isn’t an easy feat, partly because of relatively slow processing times. So to scale Dexta after the initial launch, we will utilize Solana Wormhole, a Layer 2 cross-chain bridge. Boasting over 50,000 transactions per second (TPS), the Solana blockchain will fulfill Dexta’s scaling needs. This layer will remain compatible with the BSC layer. Building on Solana also allows us to develop cross-chain markets and cross-chain swaps, capabilities that are becoming increasingly more important in a multi-chain world.
The majority of the Dexta protocol will remain static until all core capabilities are fully realized, but some risk reduced variables, such as rewards and fees, may be updated through a governance vote with DXT tokens. We will transfer partial governance during Q3 of 2021 and full governance during Q4.
The core capabilities we are aiming to provide in a decentralized way are not possible in many jurisdictions without centralized regulatory monitoring — defeating the ethos of DeFi. Because of this, our team is required to remain anonymous to fully realize Dexta’s mission.
Dexta Token (DXT)
DXT will hold, but is not limited to, the following utility:
- Staking rewards per block
- 0.01% fee on swaps
- Governance voting power
- A portion of Dexta Exchange trading fees
- Reduced Dexta Exchange fees for trades using DXT
DXT staking rewards will be higher when Dexta Swap is initially released to incentivize adoption and will be lowered afterwards.
Distribution of the 0.2% Dexta Swap fee is the following:
- 0.18% — Liquidity Providers
- 0.01% — DXT Stakers
- 0.01% — Dexta Fund
Initial supply — 10,000,000 DXT
- 50% — Token sale
- 12% — Liquidity (locked)
- 12% — Staking rewards
- 10% — Ecosystem, marketing, partnerships
- 10% — Current and future team members (timelocked)
- 6% — DXT airdrop
Token sale funds will be used to cover current and future development and marketing costs and to provide liquidity. Liquidity will be locked immediately after the token sale, and team tokens will be timelocked with scheduled releases. Part of the ecosystem allocation will be used to fund projects building on the Dexta protocol.
Once the 12% staking allocation is distributed, similar to UNI and CAKE, DXT will be inflationary as rewards are provided to DXT stakers, to incentivize active participation in the growth of the Dexta protocol. Block emission rates will be finalized after receiving feedback from our community. Burn mechanisms to minimize inflation will be added after the protocol is launched. All things considered, we believe the long-term value of DXT will be derived from its yield generation capabilities and governance power over a fundamentally valuable protocol.
This is what 2021 is going to look like:
- Q2 — Token sale, liquidity, Dexta Swap, DXT airdrop
- Q3 — Dexta Exchange, governance
- Q4 — Margin trading, multi-chain protocol
We will first launch an AMM powered DEX (Dexta Swap) to provide utility and rewards to early adopters and will release Dexta Exchange the following quarter. We will also consistently perform audits as new capabilities are developed to ensure the Dexta platform remains secure.