The advantages of Avalanche are myriad; from the near instant finality to the deployment of subnets, it is becoming a hub not just for DeFi but for all things blockchain. The base chain of Avalaunch has established itself as a juggernaut in crypto and the recent market validation from Rush and Blizzard speaks to a massive interest garnered in more traditional circles. This portends a very bright, well capitalized future for Avalanche and Avalaunch is proud to call it “home.”
As the space evolves, Avalaunch can not afford to remain stagnant; it must innovate. From incubation to IDO, Avalaunch has made great strides in nurturing the growth of new projects that build on Avalanche. For every IDO that has been performed, the team has spent months working with these projects prior to and following a given listing. It is a far lengthier process than a community may realize and fairly intensive. Post sale, there is continued communication and additional introductions that need to be made in order for each initiative to smoothly find their path forward.
An Integrated Future
The Avalanche community is tight— moreso than most, and a surprising amount of communication exists between even the most disparate of projects. At Avalaunch, whenever we assess where things could be further improved, we often look no further than our fellows. Platypus is showing us what a smart stable swap with pooled liquidity can do and Trader Joe continues to contribute with inventive mechanics to bid on and ultimately bolster liquidity for projects. It is indeed an exciting time.
Avalaunch has always envisioned a seamless and decentralized continuum for projects. From idea to ideation, the team believes it can be near modular as prospective projects can graduate from one phase to the next, making incremental improvements and maturing as they move towards a listing event. Avalaunch and the decentralized exchange, Dexalot have already known each other for some time and consider ourselves to be wholly complementary projects. Their vision of creating a decentralized exchange (“DEX”) that offers all the benefits of a traditional, centralized exchange is much needed and we are aligning in an effort to address the limitations of the automated market maker (“AMM”).
A Pain Point
A sticking point for decentralized crypto surrounds listings. While Avalanche DEX’s have done much to make the market more liquid and tradable, there is nothing resembling a traditional central limit order book (“CLOB”) where bids and offers can be placed and executed upon. CLOBS are the most capital efficient way to trade and with rare exception, every person’s first crypto experience involves interacting with a CLOB in places such as Coinbase, Binance etc. As our community knows, we eschew “first come first serve” type distributions and to date, have preferred to buy unsold tokens and gift them to participants rather than subject our community to gas wars, bots, restrictive time frames and any practice that falls outside the maxim of “fair trade.” As the Avalanche ecosystem continues to make great strides, the onboarding of new projects must also evolve with it.
The Dexalot Solution
Dexalot is a state-of-the-art decentralized exchange with market making and a CLOB. It will also be one of the first subnets built on Avalanche and this status as a subnetwork will allow Dexalot to offer benefits and features unique to them.
Dexalot has identified a number of problems within the world of listing on decentralized exchanges. Among them:
- AMMs don’t have limit order functionality, slippage control isn’t enough.
- Bots and MEV (miner extractable value) wreck users during launches.
- IDOs work well, but launching tokens on AMMs simply doesn’t.
To better improve outcomes, Dexalot has taken some cues from legacy finance to create a new process for listing assets called “Dexalot Discovery.” This impressive feature set is designed to optimize listings.
Dexalot Discovery will:
- Support limit orders.
- Prevent bots from shutting out users.
- Give users ample time to enter orders and match.
- Create a more orderly and fair price discovery process.
- Following price discovery, AMM listings become safer.
A Fairer Future
As stated before, Avalaunch works with projects pre and post sale. Moreover, it ensures every user can receive an allocation and imposes maximum allocations along with clustering to optimize distribution. The goal is always to maximize the benefit for the greatest number of users as an Avalaunch sale is truly a distribution event and the beginning of a long-term partnership. With Dexalot, it will be more.
Avalaunch and Dexalot have shared values and the alignment is a link that forms like connective tissue; representing a big step forward in providing new market entrants a smoother start. Projects will be able to seamlessly move from an IDO to a listing that overcomes many of the hurdles that AMM listings face.
The advent of the automated market maker was watershed in crypto. Rather suddenly, there was liquidity for projects that may not have otherwise gained needed support. For liquidity, providers were able to benefit from what they provided in the form of LP fees. It was a solution to a bigger problem wherein blockchains like Ethereum were simply too slow to support a traditional order book. And, make no mistake, it was a coup. However, it led to the issue of impermanent loss and the continual rebalancing of liquidity created additional exploits. Then there are bots. On a public blockchain, there is no way to stop a bot from interacting with a smart contract, thus new listings are populated by bots who can snipe bids and create an inordinate amount of buy pressure at higher prices. It is suboptimal to say the least.
Dexalot does not have this problem. As a decentralized exchange with a centralized order book and market making support, the aforementioned issues are mitigated. There are bids and asks which can be filled or rejected. Organic price discovery can now be realized. Avalaunch users understand that demand can far exceed supply even in the face of a seven-figure IDO and have been frustrated as they view an IDO as their one shot to buy a token at a ‘natural’ price.
The integration will be subtle but potent. Users of Avalaunch will have the opportunity to automatically deposit their IDO tokens into Dexalot with the push of a button.
- A deposit button automatically places IDO tokens into Dexalot.
- Place bids and offers prior to the listing.
- A DEX that functions as a centralized exchange with CLOB.
- Once on its own subnet, Dexalot will control gas fees and make it less burdensome to trade.
- New projects will experience real price discovery.
- Token prices will be based on true supply and demand.
Many crypto investors are inexperienced with either the nuances of trading or navigating the technology—or both. AMM’s have opened up a new world but have also created avoidable losses as price can be dictated not by demand but by technology. An unspoiled launch can result in a smoother arc as projects garner awareness over days and weeks versus mere seconds. This integration is not here to stanch up or downside, rather, to allow for a better beginning.
Users will now have ample time to present their best bids and offers similar to how one registers for an IDO on Avalaunch. In essence, utilizing Dexalot’s CLOB capability equalizes the chance for anyone to get a piece of a particular project.
New projects are early stage companies with tradable assets. This is the key driver of speculation in crypto and having a “cleaner playground” will not dampen the spirit of our “wild west.” Rather, it will attract new entrants to this burgeoning market place and entirely new asset class. There are no capital requirements for participation, ever dwindling barriers to entry and the elimination of of bad behavior would be a fast track to adoption and additional capital inflow.