What Is DeGate (DG)?
DeGate aims to be an Ethereum layer-2 (L2) native decentralized exchange (DEX) protocol that is formed, governed, and owned by the community as a Decentralized Autonomous Organization (DAO), whereby the token will be distributed to the community via a fair-launch process. They expect the protocol to encompass a full-set of exchange-related modules including but not limited to autonomous-market-making (AMM) functionalities, order books, leverage-capabilities, L1-L2 bridge, fiat on/ off-ramps, and initial-offering capabilities.
DeGate Storage Key Points
|Circulating Supply||84,352,292.08 DG|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
The technical constraint of Ethereum layer-1(L1) brought forth an interesting challenge due to high cost and uncertain process timing, the common order book + market-depth exchange model practiced in traditional finance does not really work. Thankfully, the ingenuity behind the Uniswap team brought forth a new, cheap way of trading ERC-20 tokens effectively – a mathematical-formula-driven, “vending-machinelike” model which we call Autonomous Market-Maker (AMM).
The elegance of this solution plays well into the confines of Ethereum L1 today and achieved strong product-market-fit, evident by the ~1-1.2 Bn USD of transactional volume per day by Uniswap alone (No.4 in the world if DeGate compare across all crypto exchanges). It appears self-evident that the AMM DEX model is not only the mainstream, but also the optimal way of exchanging tokens on Ethereum today.
The order book module will follow a design of off-chain order submission + on-chain match-making in order to save on on-chain transactional fees as well as processing time lag / inefficiency around the onchain submission process. DeGate feel that the “permissionless” feature is retained through this process – despite the order being submitted off-chain pre-match-making – as the order is digitally signed and tamper-proof from a 3rd-party. There will be no admin key to siphon or access user capital within the order book in any way. Any user can deploy the open-sourced code and interact with the order book module directly.
DeGate Leveraged Trading
Leverage had always been a core need amongst crypto users – and your leveraged trading module aims to offer a permission less and robust user experience via close collaboration with outside decentralized lending / borrowing protocols. There will be no admin key to siphon or access user capital within the leverage trading pool in any way. Since the user asset is in-effect deposited in 3rd party contracts (along with the liability) to enable leverage, we must also ensure that such 3rd party smart contracts are sufficiently robust.
Council DAO plans to review the collaborating protocols thoroughly in particular around admin key rights on custodied assets. Given the significance of selecting an outside partner, this decision would also be voted on by Home DAO via your DG token. Any user can deploy the open-sourced code and interact with the leveraged trading module directly.
DeGate bridge aims to establish a 2-sided market for “fast-track” transfer of assets across different layers. They would aim to first enable a fast-track between L1 and L2, then fast-tracks between L2s. The design would start off in a centralized manner, where the assets custodied are fully guaranteed by the net asset within Home DAO; as Ethereum L2 oracle matures, DeGate Bridge will move to decentralize the mechanism.
It is important to note that the Optimistic Roll up design relies on 3rd parties posting challenges during the dispute period to ensure the fidelity of L2 to L1 transfers and L2 states. This challenge period is currently set at 7 days to be short enough for a smooth experience but also long enough to provide 3rd parties ample time to react. For more information, please see the research piece by Paradigm.