FXDX v2 Roadmap: Building Deeply Liquid On-chain Derivatives
Ambitious Vision. Pragmatic Execution. To Scale Beyond Limits.
Building a perpetual dapp capable of adapting to shifting trends, hypotheses, and theoretical frameworks presents a formidable challenge. However, it’s a crucial step for achieving scalability in today’s fast-paced digital landscape. By embracing this problem-solving approach, a protocol can ensure its relevance and impact over time.
At FXDX, we’re on a mission to create v2 while keeping in mind that adaptability is key. After months of tireless development, we’re thrilled to share our updated roadmap with both vision and action-packed execution.
An ever-changing paradigm: A glimpse of past
While building V1 and going live on Algorand (~400M+ trading volume) and then on Optimism and Base (~20M trading volume), we primarily identified the following pain points of DeFi hindering its growth: Listings and Liquidity.
Fundamentally, we have a chicken-and-egg problem in DeFi, where if there is surplus liquidity, there are very limited usage or use-cases and where there are several use-cases, there is very limited liquidity to support the use-cases.
Generally, any protocol in DeFi is built to
- enable deep liquidity for various use-cases
- utilize the deep liquidity in a process or framework
which resolves either of the pain points. Only a handful of the protocols are working to resolve both pain points. For the ones who are working, they have been able to resolve liquidity for only a handful of use-cases.
In FXDX v2, we have been working on building our next version of the protocol, to achieve infinite scalability, unlock billions of dollars liquidity flow into DeFi, enable billions of dollars of daily trading volume, hence operating at any scale.
Furthermore, scaling DeFi by ourselves is a far-stretched dream. Hence, we are building our infrastructure from ground up to scale every other perp DEX and those who want to offer perpetual futures to their end-users but also scale our peers by allowing them access to a wide range of assets and deep liquidity, making DeFi even more liquid.
We are dividing our V2 into 2 iteration:
- Aggregator: Improved Liquidity and Listing from Day 1
- Pool-based Market: Upscale Listings and Liquidity from ground-up
Unification of Liquidity & Listings On-chain: First Step
The substantial difference between size of the CeFi derivative volume (~in trillions per month) as compared to their DeFi (~in billions per month) is primarily due to the fact that DeFi’s deep on-chain liquidity is segregated across several protocols.
Hence, in the first iteration of the product, FXDX v2 will focus on unifying liquidity across all available liquid protocols. We have been building a perpetual futures aggregator to enable traders to trade across all listed protocols from one terminal.
At the current stage of perpetual DEXs, no single DEX has the capacity to facilitate a long or short position with size of $100M even on blue-chip assets such as BTC or ETH. But if we aggregate even the top 2–3 liquid perpetual DEXes, we are able to achieve this, which is the reason why we built the aggregator in our first step. Furthermore, it is easier to manage the positions and its risks at one terminal. Users will also be able to access their existing positions on these DEXs via FXDX v2 Aggregated Terminal.
Next, we will open this version to private beta for community feedback on March 31st, 2024, 11am UTC.
Unlocking Liquidity and Enabling Trade at any scale: Second Step
While aggregation resolves some of the pain points of DeFi at the current stage, in the upcoming bull market, it might not be the case. As there will be an influx of new upcoming real-world and crypto assets in the next few months, DeFi will need to level up to support them and by giving use-cases to such tokens, deliver a capital-efficient ecosystem at any scale.
Keeping this in mind, we have been working on building a second iteration of the protocol, enabling FXDX or any other perp DEX to scale its liquidity and listing on the fly. This will enable DeFi to achieve deep on-chain liquidity and listings like never before by allowing anything to be traded using anything as collateral to capture the ever-growing gap between the crypto market capitalization and the total value locked, while being risk cautious.
Our Vision: Imagine billions of dollars of assets flowing into DeFi unlocking billions of dollars of open interest facilitating trillions of dollars of trading volume on a daily basis to match with TradFi’s capacity. An asset could be an NFT, crypto asset, stablecoin, real-world asset, data stream, yield-bearing token, and so on.
We have been working on releasing a documentation and whitepaper draft in the coming weeks. We will be sharing weekly development updates for this iteration moving forward.
For testnet launch of this version, we are targeting 30th June, 2024.
Roadmap
Building To Make On-chain Derivatives More Liquid
As a team overlooking DeFi for almost a decade, we envision DeFi to be able to support and scale infinitely and we are working with several other protocols to make on-chain derivatives more liquid.
Creating the meta: Where there is an asset, there is liquidity. Where there is liquidity, there will be use-cases. And where there are use-cases, there is going to be volume.
We would like our community to share their feedback and opinion in regards to our roadmap and we welcome our community members to help us achieve the vision: Let’s make On-chain Derivatives more liquid. One asset at a time.
Links:
Website: https://fxdx.exchange
Twitter: https://twitter.com/fxdxdex
Discord: https://discord.gg/x4JSNSTg98
