DeGate (DG) Coin Review : It Is Good Or Bad Review

About DeGate (DG)

DeGate (DG) 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. We expect the protocol to encompass a full-set of exchange-related modules including but not limited to autonomous-market-making (AMM) functionalities, orderbooks, leverage-capabilities, L1-L2 bridge, fiat on/ off-ramps, and initial-offering capabilities.

DeGate (DG) technical constraint of Ethereum layer-1(L1) brought forth an interesting challenge: due to high cost and uncertain process timing, the common orderbook + 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 we compare across all crypto exchanges). It appears self-evident to us that the AMM DEX model is not only the mainstream, but also the optimal way of exchanging tokens on Ethereum today

DeGate (DG) As layer-2 technology on Ethereum matures, however, we believe that the transactional throughput within the Ethereum ecosystem is about to explode by at least 2 orders of magnitude in the coming years, if not months. The significant reduction in cost per transaction (Tx) on L2 thanks to rollups (See “An Incomplete Guide to Rollups”) will make cost-prohibitive / uneconomic design-choices on L1 possible, or even optimal. We strongly believe that this sea-change will empower new design primitives and lead to significant market share shifts – it is with this belief that we are throwing our hats in the ring with DeGate

DeGate (DG) Storage Key Points

DeGate AMM

The AMM module will follow the most commonly adopted “x*y=k market maker” design with “virtual quantities” to prevent front-running. The various key metrics including but not limited to commission %, virtual quantities setting, Home DAO take-rate, and liquidity-mining schedules. In particular, we aim to set the commission rate to be markedly below existing L1 AMMs today. There will be no admin key to siphon or access user capital within the AMM Pools in any way. Any user can deploy the open-sourced code and interact with the AMM module directly

DeGate Orderbook

The orderbook 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 one chain submission process. We feel that the “permission less” 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 orderbook in any way. Any user can deploy the open-sourced code and interact with the orderbook module directly

DeGate Leveraged

Trading Leverage had always been a core need amongst crypto users – and our leveraged trading module aims to offer a permissionless 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 our DG token. Any user can deploy the open-sourced code and interact with the leveraged trading module directly

DeGate Bridge

DeGate bridge aims to establish a 2-sided market for “fast-track” transfer of assets across different layers. We 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. Let us walk through an example on how this L1-L2 fast-track works, using Optimistic Rollup as the L2: DeGate Bridge’s asset pool curve will look similar to that of Curve – where liquidity is utilized more efficiently around the 1.0 peg and ideal for in-kind assets. In our case of L1 asset pool : L2 asset pool, however, despite the assets being very much alike, the kink is that they share different states. In the case of Optimistic Roll-up, in particular, the transfer from L1 to L2 is instantaneous, while the transfer from L2 to L1 could take around 7 days. Therefore for in-kind assets, we expect L2 assets to trade at a slight discount to L1 to at least account for the time value of money.

DeGate Fiat

DeGate Fiat will serve as a fiat on/off ramp for stablecoins on L2. The product will interact directly with parties that hold financial licenses in respective regions to offer users smooth experiences to bring their fiat currency onto and off from L2. To utilize the service, users would have to abide by respective Anti Money Laundering / Know Your Customer (AML / KYC) rules set out by our partners. As a L2-Fiat fast-track, we expect DeGate Fiat to provide significant support to our DEX business

DeGate Launch

DeGate Launch will be a decentralized initial token offering platform, whereby it aims to only be a display tool for issuing projects as a differentiator. We do not plan to examine or approve any project launches. There will be no admin key to siphon or access user capital within the launch pool in any way. Any user can deploy the open-sourced code and interact with the Launch module directly. As a L1-L2 fast-track, we expect DeGate Bridge to provide significant support to our DEX business

Why Should You Choose

Comprehensive Decentralized Exchange

Build a one-stop, low-fee and most liquid DEX for global users, by rolling out AMM, order book trading, and margin trading.

Permissionless Initial Offering

Bring permissionlessness to initial token offering that anyone can launch or participate.

Fast L1-L2 Bridge

Make L1-to-L2 cheaper, and L2-to-L1 faster. Asset transfers between L2s will also be enabled.

Compliant Fiat Gateway

Provide L2 users with a direct fiat on/off -ramp that is fully compliant.