IDEX：the old brand DEX, moves to Polygon for another sprint
Sponsored By IDEX
IDEX strives to be the leading DEX and is the first Hybrid Liquidity DEX that combines a high-performance CLOB with an Automated Market Maker (AMM). The platform combines the benefits of DEXs and CEXs, the performance and functionality of an order book, and the security and liquidity of an AMM.
The former glory of IDEX
IDEX is an old brand DEX, which was first launched in 2017 (Order book + aggregation model)。 It ranked №1 in DEX trading volume for two years in 2017 and 2018.
The rise of the AMM model and the problems it faces
In 2019, the emergence of the AMM model made efficient on-chain trading a reality and provided liquidity rewards for users, thus quickly becoming a trend in DEX. Today, the top 10 spot DEXs in terms of trading volume all use the AMM or its improved model, with leading projects such as Uniswap, Curve, and others. However, such DEXs often encounter problems such as failed trades or front-running trades, which is an inherent flaw of the AMM mechanism. Data shows that five percent of transactions of DEXs on Ethereum fail due to excessive slippage or insufficient gas fees. Developers have tried to explore solutions to these problems at various levels, such as integrating complementary services like Gelato to implement pending orders, extending to new ecosystems to solve the gas fee problem, and improving AMM mathematical models (e.g. Uniswap V3’s aggregated liquidity) to improve liquidity utilization efficiency.
IDEX’s Solution: Order Book + AMM
To solve these problems, IDEX has introduced the concept of “Hybrid Liquidity” for the first time in the industry. Specifically, IDEX has not only an AMM-based on-chain exchange pool, but also an order book system based on off-chain aggregation. IDEX then uses its unique mapping system to quantify the price curves in the AMM pool into orders of different price levels, which are placed on the order book at the same time as the off-chain aggregated orders. The trading engine automatically matches the best price combinations for different order categories to find the cost-optimal trading path for the user.
For ordinary users, based on IDEX trading operations, you can freely list orders at the ideal price position, which makes the operation much more flexible. At the same time, there is no need to pay excessive fees and time during the trading process, because IDEX’s trading engine will quickly process all matched orders, completely solving the problem of failed or front-running trades. In addition, users in IDEX get access to much lower or inexistent slippage when trading thanks to its dual order mode, making the overall quote more reasonable.
For market makers, the changes brought about by this IDEX innovation are even more obvious. Regular liquidity providers (LPs) accustomed to AMMs can continue LP mining in IDEX’s AMM exchange pool, while more specialized market making teams can execute more flexible, high-frequency market making on their order book systems through the API tools provided by IDEX.
IDEX V3 on Polygon
The reason why IDEX V3 (Hybrid Liquidity) was chosen to be deployed on Polygon is because Ethereum is extremely complicated to list orders on the chain due to block time, gas fees and other factors, while Polygon can make up for these shortcomings. Of course, IDEX is not the only one using hybrid liquidity, there are also many teams on other high performance blockchains deploying hybrid liquidity DEX with order book + AMM, such as Serum and Raydium on Solana.
IDEX V3 does not require KYC, the custody and authorization of funds is controlled by smart contracts (all final transactions occur on the chain and require user signature authorization to execute), and transaction execution is managed by IDEX’s centralized application stack. This model is similar to dYdX in that the funds management is on-chain, but the transaction process is not.
IDEX V3 went live on December 1, 2021, and as of today, IDEX V3 has a TVL on Polygon of approximately $62.6 million, a total transaction volume of approximately $992 million, approximately 1,224,042 transactions, and 0 failed transactions.
IDEX Promotions and Rewards
To further increase trading volume, TVL and user numbers, IDEX has launched a series of rewards, including：
Liquidity mining: 700,000 IDEX per week for liquidity mining rewards.
Trading rewards: 700,000 IDEX per week for trading rewards (every 12 hours, similar to dydx) and doubling trading rewards periods (Power hour).
Trading rates: To encourage market makers to increase order book liquidity, Maker’s market making rate is 0%.
Staking revenue: IDEX holders can stake IDEX by running their own nodes or participating in someone else’s hosted stake and receive 50% of the platform’s trading fee income (settled every two weeks in USDC).
Referral program: In this specific period, you can refer new users to enjoy 80% of the referred person’s commission on transaction fees, and the referred user can enjoy 5% discount on transaction fees.
Dual rewards: liquidity mining (IDEX/USDC, IDEX/ETH, ETH/USDC, MATIC/USDC) can get IDEX rewards in addition to, for example, MATIC rewards.
The IDEX team is on a mission to return the DEX to a position of leadership in the market and give users the best trading experience and product service, and will continue to improve product features and realize the vision of roadmap in the future.
In the coming months, the team will be developing and launching projects including fiat on-ramps, sponsored trading rewards, trading contests and futures trading.