The DeFi system is the implementation of the cryptocurrency potential more widely, not just storing it as value. And in Free TON, work is also underway to create its ideal business platform. One stage of the contest for creating exchanges has recently ended and the winners are already known. We’ll cover them, but first, a few words about the DeFi SubGovernance.
DeFi in Free TON: System Development
To develop the ecosystem of decentralized finance as efficiently as possible, a DeFi SubGovernance was created in Free TON. It includes professional teams of developers and engineers — Broxus, TON Labs, WinteX.pro, SVOI.dev, etc.
The following projects fell under the responsibility of the DeFi ecosystem:
- bridges to other blockchains;
- decentralized exchanges;
- as well as other tools of the decentralized finance system.
To implement them, the community holds contests, for example, such as:
After several stages of contests, the winning teams are already implementing their ideas.
Several successful concepts await implementation.
Free TON Decentralized Exchanges: On The Way To Creation
Free TON DEX exchanges will be fully operational after the completion of the fourth stage of the DEX implementation contest. As a “test of the pen”, a contest of design concepts for a decentralized exchange was held — the Free TON DEX Architecture and Design contest.The winner is Orderbook Dex Design and Architecture. Its authors presented the exchange in the form of an order book.
This concept did not become the basis for the next stages of implementing the ready-made solution, but the received information helped to formulate the requirements of the Free TON decentralized exchanger development contest.
Defined the following FreeTon DEX Implementation Stage 1 Contest conditions:
- Exchange contracts can be implemented via order book (OB) or liquidity provision (LP).
- TIP-3 tokens should be used.
- The exchange can be carried out between two users or a user and an LP using an automated market maker (AMM).
- All operations must be performed through the DeBot interface. Additional UI interfaces are welcome as well.
The contest participants created 7 initial versions of decentralized exchange services. It can be assumed all of them will be further refined and implemented in the DeFi ecosystem. Let’s talk in more detail about the works that took the first three places in the above-mentioned contest.
TONSwap from the SVOI.dev team
The developers emphasize AMM is the basis of any DeFi. With their help, everyone can create their exchange pairs. The value is generated using special deterministic pricing formulas, and not at the expense of demand, as in the case of the order book.
The functioning model of TONSwap assumes the possibility of depositing its tokens in the liquidity pool and generating income due to their presence there. The earnings of liquidity providers are formed at the expense of traders who will perform token exchange operations and pay a commission. The successful operation of the exchange will be ensured if there are numerous liquidity providers and traders on the exchange, but at the same time exchange operations should be carried out in small volumes so as not to have a strong impact on the pair’s exchange rate.
The TIP-3 token exchange system is based on the liquidity of the pair and implies the following smart contracts:
- TIP-3 token contracts — root contracts and wallet contracts;
- exchange contracts for liquidity pairs — the root contract and the contracts of exchange pairs;
- TON wallet contracts.
FLEX exchange by TON Labs
FLEX is a decentralized and distributed limit order book (DLOB) that uses the most common exchange model: the central limit order book (CLOB) and implements it in the chain through a distributed smart contract model similar to TIP-2. FLEX distributed atomic contracts solve the problem of low transaction speed and the appearance of advanced orders by distributing the load on the order book to a single price of a single pair.
The innovative idea of the FLEX exchange is to create smart contracts for each new pair of tokens, as well as to create smart contracts for each price order of the pair. Thus, exchange orders will be found and executed immediately if they exist at the moment. Or they can be made “Valid until canceled”, then the application will be partially executed as the required tokens appear.
The exchange is implemented through DeBot, so the speed of transactions on the exchange is comparable to the speed of the blockchain, there are no requests to external applications. In terms of speed, FLEX will probably outperform all solutions on the market, including Binance.
AMM from the Radiance team
Radiance developed a DEX with a design similar to Uniswap and took 3rd place in the contest.
The exchange is based on AMM and supports the DeBot interface. A web version is available that works with the ExtraTON extension. For the convenience of working with TIP-3 and TONs, three DeBots have been created, each of which performs its own functions:
- Wrapper DeBot
- Swapper DeBot
- Liquidity Provider DeBot.
They convert crystals to TIP-3, exchange tokens, and provide and withdraw liquidity from a pair of tokens, respectively.
To test the exchange, the creators are developing Telegram-bot @TONDEX_bot. In the future, it will be possible to work out standard scenarios on it and see how convenient and successful they have improved the DEX functionality.
Three steps before the appearance of DEX
All participants who have presented their vision of DEX to the Free TON community will be able to refine their projects according to the requirements of the next stages of the exchange contest and compete for rewards.
For now, we can expect further stages of the contest in this form:
- implementation of complex liquidity pool mechanics.
- the emergence of complex automated market maker mechanics.
- finalizing additional improvements (UI/UX, management, voting, etc.).
A few questions to the winner of the first stage — the SVOI.dev team
- Will you continue to develop your exchange in the next DeFi SubGovernance contests?
With the end of the contest, the work on the project did not stop. When we decided to participate in the development of DEX for Free TON, our goal was to create a complete, well-functioning product. We look forward to the announcement of the second development phase. We participate in the creation of documents for the contest.
We use the time, among other things, to make some adjustments to the system, taking into account the comments received from the judges.
- How many members of your team worked on the creation of the exchange?
There are 15 people in our team in total. The main team — six people — is working on the project. The rest of the team is busy with other projects.
- Do you plan to participate in other Free TON community contests?
We are also developing other projects/products that, in our opinion, create the basic infrastructure.
We believe in Free TON and are happy to be involved in creating a complete ecosystem.