Multi-chain decentralized exchange (DEX) network, Dfyn, has announced its migration to Arbitrum with the mainnet launch of Dfyn V2 on the network scheduled for June 15. This groundbreaking development not only showcases Dfyn’s unwavering commitment to fostering accessibility but also represents a significant stride toward achieving true decentralization in decentralized finance (DeFi).
It marks a significant step towards a more accessible, scalable, and cost-effective DeFi ecosystem, making it easier for newcomers and seasoned DeFi enthusiasts to participate seamlessly. Furthermore, Dfyn V2 will offer increased security and concentrated liquidity, addressing two major pain points in the current DeFi landscape.
The migration to the Arbitrum network will provide a better user experience alongside several improvements across the platform. Users can expect a marked improvement in transaction speeds and a substantial reduction in fees, thanks to Arbitrum’s robust capabilities and Dfyn’s ongoing efforts to optimize gas costs on the mainnet.
How Do Arbitrum’s offerings align with Dfyn’s vision?
Below are some ways in which Dfyn’s users are sure to benefit from Dfyn’s move to Arbitrum:
High TPS Throughput
Arbitrum significantly enhances transaction speeds, improving user experience. The network’s advanced technology and infrastructure allow users to experience lightning-fast transactions, enabling swift and efficient execution of trades. This upgrade in transaction speeds enhances user convenience and paves the way for the execution of more complex and sophisticated DeFi trading strategies. Therefore, Dfyn’s users can be certain that their transactions will be processed faster than lightning speed.
Low Gas Fees and High Security
Arbitrum perfectly balances cost-effectiveness and robust security measures. It is a known fact that high gas fees have been a significant challenge in the DeFi landscape, limiting accessibility for many users, especially newcomers. However, with Arbitrum’s infrastructure, Dfyn can now provide users with a cost-effective trading experience. By optimizing gas costs on Dfyn V2, Dfyn is committed to making DeFi more accessible to a wider audience.
Furthermore, the migration to Arbitrum brings a heightened level of security to the Dfyn ecosystem. Security remains a top priority in the DeFi landscape, and by leveraging Arbitrum’s robust security measures, Dfyn ensures that user funds and transactions are safeguarded against potential threats. This added layer of security will build more trust and confidence among users, thereby encouraging greater activity on the platform.
Arbitrum is undoubtedly one of the top Layer-2 networks and hosts a vibrant web3 ecosystem with numerous thriving projects and traders. As such, it is an opportunity for Dfyn’s users to access and benefit from a community with much to offer.
Improved UI and User Experience
With Dfyn’s migration, users can look forward to an even more user-friendly, efficient, and intuitive interface. Often, traders have complained about the interface of DeFi platforms and how they have encountered issues navigating their way around. With this move, users can rest assured knowing they are getting one of the best interfaces and user experiences, making the DeFi journey pleasant.
This move undoubtedly brings many benefits that greatly enhance the overall user experience. There is a lot to look forward to.
A Deep Dive and Understanding What Makes On-Chain Limit Orders Special
Initially, decentralized exchanges (DEXs) mainly relied on automated market makers (AMMs) to function. Some top DEXs like Uniswap still do. However, there is no denying the shortcomings of this trade execution mechanism, as with AMMs, traders had little or no control over the price they got in the end. You simply put in your capital and hope you get the best price for your asset.
To find a solution to these shortcomings, DEXs began to integrate order books and limit orders features on their platform. That allowed traders to place limit orders and get their desired prices for their buy or sell orders. It also meant that their assets were more secure as it curbed the menace of slippage and impermanent loss. The introduction of order books and limit orders undoubtedly made trading on DEXs better, but it came at a cost; the centralized elements of centralized exchanges embodied what true decentralization should not resemble.
As such, another problem arose, and the question on the minds of many was how these features could become a mainstay on DEXs while eradicating the centralized elements of this feature. The earlier decentralized limit order mechanisms lacked sophistication. They still had an iota of centralized elements as they mostly executed trades through an off-chain order matching system or off-chain nodes that perform a market price swap when the desired price is reached. They are off-chain limit order books with a touch of on-chain mechanisms.
It was evident that there was a need to develop a secure, scalable, and efficient on-chain mechanism that could eliminate the shortcomings of the AMM model and handle the complexities of an order book and limit order features while maintaining true decentralization. That was no small task, as any proposed solution had to be reliable enough to withstand the market volatility and allow users to implement whatever trading strategy they desired.
Popular DEX aggregator 1inch rose to the challenge when it launched its Limit Order Protocol in 2021. This protocol allowed users to place limit orders on-chain, attracting more than 20,000 users and facilitating 60,000 trades worth $2.9B. This traction highlights users’ preferences for limit order trading and how DEXs can stay ahead of the game and enjoy improved capital efficiency when implemented correctly and decentralized.
How Dfyn Comes Into the Picture
With Dfyn V2, Dfyn has developed a truly decentralized on-chain limit order that allows traders to place orders on the blockchain specifying the minimum or maximum price at which they are willing to buy or sell an asset. As such, the trade executes automatically when the asset’s price hits that target, eliminating the need for a third-party intermediary.
On-chain limit orders provide a convenient way for users to trade assets without relying on a central authority to match buyers and sellers. It also ensures the successful execution of every order. With this, Dfyn’s users can enjoy the core benefits associated with traditional order books in the DeFi ecosystem while experiencing a truly decentralized financial system.
Why On-Chain Limit Orders?
There are several benefits to DEXs adopting On-chain limit orders, especially for their users. They include:
- On-chain limit orders are executed on the blockchain and automatically, and as such, they allow for a seamless and efficient way to trade without reliance on a third-party intermediary.
- On-chain limit orders ensure order fill. For instance, Dfyn has limited liquidity embedded in the curve itself, and when the price passes a certain price point, the limit order at that point will get filled. Also, the market price doesn’t go further without the limit order liquidity at that price point being exhausted first.
- On-chain limit orders are executed on the blockchain, making all trades transparent and always verifiable.
- Because On-chain limit orders utilize smart contracts, they are a more secure and tamper-proof way to execute trades. This mechanism further reduces the potential risks of fraud and asset loss.
High-Level Liquidity With Dfyn’s Hybrid Model
Dfyn V2 has introduced an innovative hybrid model combining concentrated liquidity AMM and limit order liquidity to address the shortcomings and offer a superior solution for decentralized on-chain limit orders. This model aims to provide more depth and liquidity to the market, addressing a major concern on AMM-based decentralized exchanges. It further ensures price precision and reduces the risk of slippage for traders.
By combining both models, users enjoy the best of both worlds; the concentrated liquidity AMM allows Dfyn to offer enough liquidity for popular trading pairs, ensuring trades are executed reliably and swiftly. On the other hand, the limit order liquidity hands more control to traders as they can execute trades at their desired prices.
What New Features Can DeFi Enthusiasts Expect on Dfyn V2?
Alongside the migration, Dfyn will introduce exciting new features:
Fee Auction Model
Dfyn plans to incentivize users with a fee auction model. The platform will auction fees collected from swaps, and the highest bidder, who can bid using $DFYN tokens, will receive the accumulated fees. That undoubtedly adds an element of excitement to the auction and further demonstrates the utility of $DFYN tokens within Dfyn’s ecosystem.
This feature is expected to incentivize users to acquire and hold $DFYN tokens, as these tokens unlock potential rewards from the auction. It also encourages token holders to actively engage with the platform and maintain a vested interest in its success. Furthermore, it fosters a sense of community and collaboration as participants, in competing to be the highest bidder, contribute to the overall liquidity and growth of the Dfyn ecosystem.
Perp Agg is another exciting feature that Dfyn has included in the second iteration of its platform. This new feature calculates risks between platforms, consolidating liquidity from a broad range of exchanges and streamlining them for optimal performance. Although similar to Paraswap, this feature focuses more on perpetual trading, simplifying the perpetual trading experience and increasing overall efficiency.
Perpetual trading is known for its intricacies, with risks and opportunities constantly changing across various platforms. As such, the Perp Agg is a welcome feature. By aggregating liquidity, Dfyn ensures that traders have access to the best possible prices and enhanced liquidity depth, enabling them to execute trades with minimal slippage and maximizing their potential returns.
The Perp Agg feature also undoubtedly contributes to the growth of the Dfyn ecosystem. By providing a comprehensive and efficient perpetual trading solution, Dfyn establishes itself as a go-to platform for traders seeking optimized trading experiences, improved risk management, and increased profitability.
Dfyn will also introduce cross-chain swaps, a necessity due to the migration to Arbitrum. That will enable users to transact across different blockchain networks seamlessly. This cross-chain functionality opens up new opportunities for users to access assets and liquidity from a broader ecosystem, further expanding the possibilities within the Dfyn platform.
This move marks a significant leap forward, benefiting the Dfyn community and DeFi. It further opens the DeFi doors to newcomers who were once possibly discouraged from venturing into the world of Decentralized Finance (DeFi) by the issues addressed with the updates and features on Dfyn V2.