AVAX tokens will be distributed as trading rewards when the order book-based DEX hits volume milestones over the next 12 months
The Avalanche Foundation has awarded $3 million in AVAX tokens to Dexalot, a fully on-chain Central Limit Order Book (CLOB) DEX running on its own Avalanche subnet.
The foundation will distribute funds over the next 12 months, beginning in the fall, through Dexalot’s established incentive program. Funding remains conditional on Dexalot’s DEX meeting volume-based milestones.
Dexalot’s subnet has processed over 12 million transactions since its launch in February 2023.
The foundation’s $290 million Avalanche Multiverse initiative leverages AVAX token grants to accelerate the growth of Avalanche subnets – independent application-specific networks.
AVAX token is down 9% over the past two weeks. Meanwhile, Dexalot’s native ALOT token is up 15% over the same period.
MUCH price
Challenges in building a CLOB DEX
A Central Limit Order Book (CLOB) is a live list of buy and sell orders for an asset, organized by price, time and priority, and is the model used by centralized exchanges. This is in contrast to the Automated Market Maker (AMM) model that many DEXs use, where prices are determined by the ratio of assets in liquidity pools.
CLOBs offer a better trading experience than AMMs as they enable real-time price discovery by directly matching buyers and sellers, resulting in potentially tighter spreads and more efficient markets.
According to Tim Shan, COO of Dexalot, other Layer 1 and Layer 2 networks proved to be insufficiently powerful to build a CLOB DEX.
“Fully integrated CLOB-DEXs are very difficult to build on most L1s and even L2s because CLOBs require high speed, high throughput, and low gas fees.” Also, most of the few true CLOB-DEXs today have critical off-chain functions and are therefore not really “decentralized,” Shan told The Defiant.
The Avalanche subnet offers high throughput and fast completion in the millisecond range, as well as complete transparency and predictable gas charges. These features benefit market makers, who provide liquidity to order books with tens of thousands of daily orders, according to Shan.
“CLOB DEXs simply offer users better prices and without the intrinsic disadvantages of AMMs, such as temporary losses and slippage,” Shan said.
Practical approach
Members of the Avalanche Multiverse program receive ongoing support from the Foundation.
“It is important to continue to guide the teams throughout the duration of the program and help them thrive within our ecosystem and the broader crypto landscape as a whole,” said Luigi D’Onorio DeMeo, head of DeFi and DevRel at Ava Labs. said The Defiant.
According to DeMeo, the foundation isn’t focused on teams “chasing money or narratives” that may not value network loyalty or technological advances, but rather “on providing grants for projects that build on Avalanche and have a solid track record and assertiveness.” .”
Rather than paying out grants upfront and risking teams losing motivation, the foundation structures grants around milestones that prevent AVAX tokens from being released until they are met.
“In this case, Dexalot unlocks a larger portion of the grant as volume-based milestones are met over a period of time,” DeMeo said.
According to DeMeo, the foundation could base additional grant milestones on user level, total locked value, transactions, or other verifiable metrics.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.