The total value locked in DeFi protocols has increased from $21.6 billion in January 2021 to $256.91 billion today, indicating a 1,089.4 per cent increase. However, nothing is being done to address the reoccurring issues in the DeFi ecosystem. Major challenges include failed transactions, front-running, and miner extractable value (MEV). Uniswap, a decentralised cryptocurrency exchange (DEX), has announced a drop in rejected transactions from 11% to 6% throughout its network. However, Uniswap customers reported over 100,000 unsuccessful transactions this week alone. This indicates the seriousness of the problem. To make matters worse, MEV continues to be a major issue in the DeFi ecosystem, with over $750 million taken on Ethereum, the majority of which links arbitrage transactions.
Accordingly, IDEX and Polygon are in a partnership to address these problems. The biggest decentralised cryptocurrency exchange, IDEX, has announced the debut of its v3 Hybrid Liquidity DEX on Polygon. The introduction of the world’s first hybrid liquidity DEX attempts to address the fundamental flaws in the DEX ecosystem. Flaws such as front-running, slippage, and sandwich attacks. Meanwhile, it also safeguards users from the Ethereum network’s soaring gas expenses. The new exchange design provides crypto traders with a one-of-a-kind trading experience. It also retains the typical characteristics of centralised exchanges (CEXs) and DEXs, such as a high-performance order book, increased security, and AMM pool liquidity.
IDEX v3 Hybrid Liquidity combines an order book and pooled liquidity from automated market makers (AMMs). It shields consumers from AMM traps by instantaneously executing transactions against the best mix of limit orders and pooled liquidity. This technique offers greater profits for liquidity providers, enables sophisticated transactions like stop-loss and limit orders, and allows for fair, real-time trade execution.
Additional incentives offered by IDEX
In connection with the release of the v3 protocol, IDEX is introducing a variety of novel incentives for DEX users-
1. Liquidity Mining
To increase liquidity, IDEX is committing 1,400,000 IDEX each week to liquidity mining awards on IDEX v3. Accordingly, IDEX will give rewards via a weighted distribution across all pools/markets accessible on IDEX v3.
2. Trading Rewards
IDEX is launching a trading rewards programme that will run for two 15-day periods in a row. Users will get a proportionate quantity of IDEX from the rewards pool. It will be on the basis of their volume relative to exchange volume throughout the 15 days. The Trading Rewards website will have the rewards available 1-3 days after the 15-day period has ended.
3. First Trade Bonus
IDEX has pledged 1,000,000 IDEX as a first trade bonus. It is available for wallets that have previously traded on the Polygon versions of QuickSwap or SushiSwap. The first trade incentive will be available on the Trading Rewards tab after December 12.
4. Free MATIC Faucet
For users to claim MATIC, IDEX v3 on Polygon has developed a MATIC token faucet. Traders can claim once per wallet by simply clicking ‘Claim MATIC’ on the exchange’s navigation bar.
Following the introduction of the IDEX Hybrid Liquidity Mainnet, IDEX intends to extend this to more networks to provide these unique capabilities to a broader trading audience.
What is IDEX?
IDEX is a decentralised exchange combining components of centralised exchanges. Centralised components speed up the network while keeping its decentralised nature. The platform works on Ethereum as well as on the Binance Smart Chain.
The automated market maker concept is the most compatible initiative to conduct transactions on a DEX. However, IDEX takes a different approach. IDEX uses order books to start and execute trades of supported cryptocurrencies. The stop-loss option, which is prevalent on centralised exchanges, is available on IDEX on BSC.
IDEX employs Layer-2 Optimistic Rollups for the best functionality and performance on Ethereum. The Optimistic Rollup is a scaling approach that leverages faster off-chain transaction processing while maintaining the decentralised paradigm of the mainnet, in this case, IDEX.
What is Polygon?
Polygon (ticker: MATIC) is a full multi-chained system, as well as a framework and a protocol. It links Ethereum-compatible blockchain networks, and its design addresses the present Ethereum network’s scalability difficulties. It is a layer 2 solution, which means that it operates on top of Ethereum’s core blockchain. Polygon uses side chains to clear the main platform in an efficient and cost-effective manner.
Polygon’s multi-chain network provides an architecture for blockchain networks to connect outside of Ethereum’s core chain while retaining Ethereum’s liquidity, security, and interoperability.
Operating on the Polygon network, according to the platform, provides a reduction in transaction costs of “10,000–100,000 times cheaper” than what is generally seen on Ethereum layer-1, in addition to benefiting from the network’s full-stack Ethereum scaling mechanisms.