FIN: A DEX Built to Last
As a key product in the Kujira ecosystem, FIN is an orderbook-style decentralized exchange (DEX) that allows for the trading of assets on different blockchains. FIN has already seen impressive volume, with over $30M since July.
But FIN's potential goes far beyond its initial success. As an orderbook-style exchange, it has several key advantages that make it a more sustainable and long-lasting option compared to other DEX models:
- Improved trade execution: Orderbook-style exchanges offer better trade execution, resulting in increased capital efficiency.
- No reliance on inflationary incentives: Unlike AMMs (Automated Market Makers), which use inflationary rewards to encourage liquidity provision, FIN does not rely on this unsustainable model. Instead, FIN leverages BOW as a next generation market maker for liquidity, providing a more sustainable and efficient solution.
- Scalability: FIN is designed to be scalable, allowing it to handle increasing demand and volume. Its fair matching algorithm has O(1) algorithmic complexity, meaning it can process orders in constant time regardless of the number of orders in the system. This is a significant advantage in terms of scalability and efficiency, as it allows FIN to handle a large volume of orders without sacrificing performance.
- Low fees: With low gas fees and maker/taker fees, FIN offers a cost-effective trading experience.
- Future on/off-ramps: FIN has plans for future integrations with on and off-ramps, improving the bridging experience for users.
But why is FIN a better option than AMMs? While AMMs have been successful in solving the liquidity issue faced by many DEXs, they have their own set of problems:
- Inflationary rewards are unsustainable: AMMs use inflationary rewards to encourage liquidity provision, but this model is not sustainable in the long run.
- High APR not always due to swap fees: While it may be advertised as such, the APR for swap fees alone is often much lower than advertised, with the remainder made up of inflationary rewards.
- Volatility exposure: LPs (liquidity providers) are exposed to the volatility of the underlying token, and must be provided with a higher APR to compensate for this risk.
- Lack of alternative revenue streams: Without a plan to move from inflationary rewards to other forms of value creation, AMMs risk losing value as the token supply inflates and rewards decrease in value.
Orderbook-style exchanges like FIN do not rely on inflationary incentives and offer superior trade execution compared to AMMs. They also have a more intuitive user interface and the potential for future integrations.
In summary, FIN is a scalable DEX with lower fees and improved trade execution, making it a strong contender in the decentralized exchange market. With its focus on sustainability and long-term success, FIN is well-positioned to stand the test of time.