The DeFi field has amazing upside potential. Whether it is relative to the entire crypto market, or especially relative to the traditional derivatives market, the total value of DeFi is negligible. New users entering the field will bring liquidity and promote the exponential growth of the DeFi derivatives market.
Compared with the products launched by CEX, the transaction of various products in DEX is still not much, but the decentralization features such as permissionless and non-custodial insisted by DEX are becoming more attractive to the crypto world, coupled with a large number of professional flow which has solved the liquidity problem that DEX has been facing. We are looking forward to the breakthrough development of DEX market share.
Among the few DEXs, INJ and YFX are mainly based on decentralized derivatives contract transactions in terms of products. Let’s take a look at the differences between the two DEXs in terms of trading mechanisms.
In terms of market making mechanism:
- YFX applies the QIC-AMM market maker pool trading method to provide users with extremely high liquidity and extremely low trading slippage. Traders directly trade with QIC-AMM to open and close their position. The depth is a function of the available balance of the LP pool, there is no impermanence loss in the LP pool.
- Instead of the AMM mechanism, INJ only uses the Layer 2 side chain to achieve efficient transaction efficiency, and makes it possible to trade cross-chain assets by basing on the Cosmos-Tendermint underlying protocol.
In terms of transaction mechanism:
- YFX adopts the market maker fund pool trading mechanism, each trading pair corresponds to a market maker fund pool. All user orders will be traded with the market maker fund pool and the user’s profit and loss will eventually be directly conducted with the market maker fund pool settlement. In the process of market making, market makers only need to invest in one currency to participate in market making. If the net value at the time of redemption is higher than the net value at the time of purchase, it can make a profit.
- INJ is temporarily in the testnet stage and has not publicly disclosed its trading mechanism.