If you’ve been following O3 Labs, you may have heard that we built a cross-chain decentralized exchange (DEX) called O3 Interchange. You may have used our O3 Swap product before, or you may have used a DEX like Uniswap or the myriad other DEXs on the market. O3 Interchange will be unlike anything you’ve seen before, as it allows users to exchange asymmetric digital assets across chains, not just bridging symmetric assets. This means that O3 Interchange allows users to exchange token x on chain A for token y on chain B in the same seamless way that crypto traders have come to love on DEXs. But how will it do that? Finally, the one time you bridged token x from the BNB chain to Polygon, you received token x, i.e. the exact same token that you sent.
The answer lies in O3 Swap’s history as an advanced aggregator, sourcing liquidity and trade requests from DEXs on the source blockchain before moving to another chain. Connecting users to the best DEX-based exchange rates has been our specialty at O3 Swap, thanks to the O3 Aggregator aggregating on the source chain to provide the best swap routes for users. O3 Interchange reintroduces the same aggregator to allow users to accumulate liquidity not only in the source chain but also in the target chain. This means that O3 Interchange users have the power of not one, but two DEXs in their hands on every swap. By aggregating multiple DEXs on each chain, users can get the best price for their unique cross-chain swap.
However, that is just one level of liquidity at O3 Interchange. O3 Interchange will have two tiers of liquidity; the aforementioned DEX liquidity from the O3 Aggregator and our own Automated Market Maker Liquidity Pools (AMM). This makes O3 Interchange a true cross-chain DEX as we provision these token pools ourselves with O3 users providing both native asset liquidity and the native tokens they provide using tokens or cross-chain soft- Balance asset equivalents. For example, the Eth pool contains both Eth and pEth, while the USDC pool contains USDC and pUSDC. These pools are on different chains to allow for cross-chain swaps. They will allow O3 Labs to open our entire process of minting and burning replacement tokens to scrutiny, so our protocol is both transparent and decentralized, just as the first blockchains were designed. O3 Labs does not mint the tokens to balance the pools. In fact, users will mint these soft assets themselves to take advantage of arbitrage opportunities within the pool. No other cross-chain project has done this on a large scale before, and Interchange’s trusted approach makes O3 Interchange truly special.
These trusted token-token liquidity pools are designed to provide users with native assets rather than tokens as they cross chains. This feature is based on the proven Curve AMM model, which has been thoroughly tested by other DEXs. The model is important because native assets, unlike the tokens or other third-party minted tokens, have a consensus on the blockchain. In fact, users will never interact with these tokens unless they do so to take advantage of arbitrage opportunities within these pools. These soft assets merely act as a middleman to get our users the native tokens they want, but remember that our users mint these tokens themselves, so O3 Labs does not mint the tokens themselves. Instead, users rely on each other to claim the token. Thus, Interchange’s mechanism will demonstrate a true peer-to-peer approach to asset exchange.
Finally, Interchange will be exceptionally scalable, able to quickly support new assets and blockchains. Supporting new coins simply requires the provisioning of new token-token AMM pools on-chain before luring liquidity providers with O3 rewards. O3 Swap users have consistently asked us to add new tokens and chains in the past, so we’re planning on delivering. Supporting new blockchain networks means connecting to the best DEXs on that chain, in addition to providing the most sought-after liquidity pools to facilitate trading. Supporting new chains and tokens on our bridge requires provisioning of the most demanded liquidity pools, and aggregation of DEXs is not a necessary step for the bridge module but important for the swap module. Our AMM pool and aggregator model scales with even the industry’s best cross-chain protocols.
Website: https://o3.network
DAPP: https://v2.o3swap.com/swap
Twitter: https://twitter.com/O3_Labs
E-mail: [email protected]
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