DEX is an abbreviation for Decentralized Exchange, a type of decentralized trading platform based on blockchain technology. Unlike centralized exchanges, a DEX does not require a centralized institution to conduct transactions, and all trades are executed through the blockchain network. This decentralization characteristic makes DEX more secure and transparent, and can provide a better trading experience.
For investors, DEX can offer more trading opportunities and potentially higher returns. On DEX, investors can generate profits by buying and trading cryptocurrencies, and they can gain even higher returns by participating in the DEX's liquidity pool.
For every blockchain, the importance of DEX is self-evident. Native assets can be traded and liquidity market-making can take place on DEX, providing convenience for the users of the entire chain ecosystem. Examples include Uniswap and Sushiswap on ETH, Pancakeswap on BNB Chain, and so on. Therefore, Aleo also necessarily needs to develop its own DEX to provide a trading venue for community users.
As cryptocurrencies continue to gain popularity, a growing number of people are owning their own crypto wallets. However, due to the transparency of blockchain technology, individual on-chain transactions are easily traceable, which has brought significant concern to some users. Whether it's the big whales who are unwilling to have their on-chain transactions tracked, or individual investors who are concerned about their transaction privacy, they all require an exchange that can ensure the protection of their privacy.
Leveraging the features of the Aleo privacy blockchain, each address can 'privatize' a portion of the tokens they hold. These 'privatized' tokens can also be traded on the DEX. Through on-chain contracts or public browsers, only the transaction amount can be queried, unable to be associated with specific addresses. This establishes a 'privacy transaction' feature, effectively resolving privacy concerns and allowing users who value transaction privacy to operate freely on the Aleo without worries.
Our project, named AleoSwap, aims to build a decentralized exchange based on the Aleo blockchain, which allows users to carry out transactions of any token through public/privacy mode. Also, users can form LPs (Liquidity Providers) to make markets and earn liquidity fees.
Our priority is to implement the AMM (Automated Market Maker) trading model based on Uniswap V2, which is currently the most widely applied and technically mature DEX trading model. While implementing the same public trading features as Uniswap, we will also innovatively develop a 'privacy transaction' feature. This feature supports users in 'privatizing' any tokens they hold and then conducting transactions. Consequently, no one can query the address information of the transaction, which can fully protect the user's transaction privacy. Of course, users can also 'publicize' their 'privatized' tokens at any time and use the regular public trading features.
In the future, we will develop a 'privacy market-making' feature, which will support users in forming LPs with their 'privatized' tokens to participate in market-making and earn liquidity returns. This will increase the capital utilization rate and generate additional income for some privacy token holders.
- Project initiation and development team formation.
- Building a decentralized exchange based on the Uniswap V2 model, implementing public token trading/market-making functionality on the Aleo testnet.
- Launching a token 'privatization'/'publicization' conversion feature, allowing users to freely convert any amount of tokens they hold.
- Launching a faucet, allowing users to claim test token to participate in DEX testing, while also participating in official incentive competitions.
- Launching the privacy transaction feature, supporting users in exchanging tokens without revealing their addresses.
- Launching the privacy market-making feature, supporting users to add liquidity with their 'privatized' tokens to participate in market-making, and earn liquidity returns.
- Depending on the launch progress of the Aleo mainnet, synchronously deploying on the mainnet.
- Further improving the user experience of privacy transactions/privacy market-making features.
- Developing AleoSwap V2, adopting a new AMM trading model, allowing users to choose their own market-making price range, improving user capital utilization.
- Launching stablecoin trading functionality, supporting stablecoin trades with lower slippage, while also supporting public/privacy transactions.
- Considering the development of innovative DEX products such as perpetual contracts, leverage trading, and more.