DEX Review: Dexalot - Own Your Trade
As some of you have probably already seen on X, I am now an official ambassador for Dexalot (by Chainbloq Labs), the first CLOB DEX using an Avalanche Subnet.
CLOB stands for ‘Central Limit Order Book’. Working closely together with their team, I will provide essential information regarding their DEX and shed some light on upcoming updates.
The importance of DEXs has never been as great as it is now in 2024; however, most users still prefer classical centralized exchanges (CEXs). CEXs have proven their unreliability more than once, with FTX being the most prominent example from the past. They can engage in fraudulent activities, suffer from security issues, often require KYC verification, and ultimately place your coins under their control.
However, it doesn’t have to be this way. Dexalot offers different options that are tailored for different kinds of traders:
1. Simple Swap for quick single-click trades (retail-focused)
2. Order Book for semi-pros or pros who want more control over their trades
3. APIs for sophisticated traders
None of the options require KYC, and they are non-custodial and fully decentralized.
Overview
The cryptocurrency industry is evolving and so are DEXs. For beginners who are initially getting used to CEXs, it can take some time to get used to the look and feel of a DEX. However, there are different approaches that can shorten or extend the amount of time needed to get used to using it.
Dexalot’s approach includes bringing elements from traditional exchanges, in particular, the Central Limit Order Book (CLOB), to their DEX. It is built on an application-specific network (based on Avalanche Subnet technology), is compatible with the Ethereum Virtual Machine (EVM), processes transactions within two seconds maximum, and has a transactional throughput of thousands of transactions per second.
The interoperability is a huge feature and allows for users to trade ERC20 tokens. The team chose Avalanche because of various advantages, such as the high speed with which transactions are finalized and ability to launch an application-specific network quickly; however, the project is aiming to bring liquidity to all chains through various means.
In order to achieve true interoperability, Dexalot will launch on multiple other blockchains in addition to Avalanche; it already launched on Arbitrum a few weeks ago.
Technology
Architecture & Components
Dexalot can be accessed via dexalot.com with multiple wallets, including Metamask, Trust Wallet, Rabby, and WalletConnect. All actions, such as depositing and withdrawing funds into and from the Dexalot portfolio smart contract, placing limit orders, and taking as well as cancelling orders, require a confirmation via the wallet that results in network transaction fees.
Dexalot traders can create individual orders that include the size and limit price at which it should be executed; if an order matches an already existing order, the liquidity is removed (taker order) and executed immediately. Vice versa, if there is no matching order in the order book, it will be added as a new maker order. Dexalot supports partially filled orders, where the unfilled portion of an order automatically enters the order book as a maker order.
All Dexalot smart contracts are coded in Solidity v8.x and can be checked on GitHub (https://github.com/dexalot/contracts), and they were audited by AvaLabs and Hacken.
The different components of the Dexalot DEX are:
User Wallet: Wallet that the DEX is interacting with
Frontend: User interface that shows the order book and enables anyone to place and cancel orders, as well as tracking their portfolio
Backend: Server side infrastructure, responding to frontend interactions, recording transaction activity, and serving data back to the frontend
Smart Contracts: Collection of smart contracts deployed on the Avalanche C-Chain, i.e., responsible for performing the order settlement
Database: PostgreSQL database that keeps a drop copy of all transactions on the exchange
Automated Market Makers: Liquidity providers and two-way-pricing.
As mentioned earlier, Dexalot is 100% compatible with the Ethereum Virtual Machine (EVM), and comes with a TX throughput of thousands of transactions per second and a transactional speed finality of 1-2 seconds.
Dexalot SimpleSwap
SimpleSwap is a tool that performs AMM-style atomic swaps and comes with an easy-to-use interface through which traders can easily swap tokens directly on Dexalot, complementing the existing order book format.
Dexalot Subnet
Avalanche offers so-called ‘Subnets’, which are sovereign networks that have their own rules regarding membership and token economics. A dynamic subset of Avalanche validators is responsible for achieving a consensus on the state of at least one blockchain. Each blockchain is validated by one Subnet; however, one Subnet can validate multiple blockchains.
The Dexalot team invested a lot of time to get their own Avalanche Subnet up and running in order to offer their customers cheaper transaction fees, better liquidity, and higher transaction speed.
While the first Dexalot testnet launched in August 2021, the first Dexalot Subnet Testnet was created in April 2022. Nowadays, the DEX works as a dual-chain application that exists on the Avalanche C-Chain and the Dexalot Subnet, which are both communicating with each other.
Privacy
Personally, I am a big fan of privacy-preserving solutions. At Dexalot, no personally identifiable information is collected, ever. There are also no cookies or other tracking technologies and no third-party ad services being used.
ALOT Token
The Dexalot token (Ticker: ALOT; Avalanche) is a utility and governance token for the ecosystem. It is used for governing the project via the community to enable staking by validators and delegators to secure the subnet, to pay for gas payments, and to incentivize users to use Dexalot. ALOT is currently trading at a price around $0.50 and has a market capitalization of $25 million (FDV = $50 million).
At this point, the Dexalot Incentive Program (DIP) deserves a special mention as it is a program that rewards Dexalot users with up to 4.8M ALOT tokens (200,000 per month).
The rewards are paid on a month-to-month basis, using a formula that includes three factors: the executed volume (E), the orderbook contribution (O) that scores the ‘quality’ of orders via size, duration, and order remaining in the order book, etc., and ALOT tokens deposited (A).
Another way to earn rewards is ALOT Staking, which helps to secure the network. The process is simple and consists of just a few steps:
1. Purchase ALOT
2. Choose a staking pool via DappRadar
3. Delegate ALOT
4. Start staking and enjoy your rewards
With Avalanche itself being in an early stage and the growing importance of DEXs, I don’t have to tell anyone that ALOT will offer a lot (!) of upsides over the next months and years.
What’s Next?
The Dexalot team is continuously working on improving the trading experience, including bringing Dexalot to other chains, such as the launch on Arbitrum last month. More chains are about to come, including Ethereum, Binance Smart Chain, and Base.
Upcoming shortly is the listing of USDC/USDT on SimpleSwap, the listing of more pairs on Arbitrum, i.e., ARB/USDC, and the addition of more liquidity to SimpleSwap in order to facilitate bigger trades more easily.
Team
Last, but not least, a bit of information about the team behind Chainbloq Labs, M. Nihat Gurmen and Cengiz Dincoglu (Co-Founders), Tim Shan (COO), and Jonathan Ackerman (CMO).
Prior to Chainbloq Labs, M. Nihat Gurmen (Co-Founder) worked for more than 15 years for Schlumberger, the world's largest offshore drilling company and the world's largest offshore drilling contractor by revenue, in different positions.
Cengiz Dincoglu (Co-Founder) formerly worked for Morgan Stanley, as well as for JP Morgan Securities.
Tim Shan (COO) is very active in the Avalanche ecosystem, not only working with Dexalot but also with Pulsar Games, an upcoming web3 game on Avalanche. Before that, he was working in traditional finance, for example, for Aladdin Capital Management.
On the marketing front, we have Jonathan Ackerman (CMO), who spent most of his earlier career as project and marketing manager for Red Bull.
Overall, a nicely mixed team that has long years of experience in different sectors that come in handy when building a DEX.
Conclusion
Dexalot has been in consistent development for multiple years already, positioning itself as one of the most innovative DEXs across multiple blockchain ecosystems, and in the Avalanche ecosystem in particular as the first CLOB DEX.
In my opinion, Avalanche as L1 in general is about to surprise many people this year, which will also benefit all projects built on it; at the same time, the importance of using decentralized exchanges is growing, with the number of people interested in using them rising constantly.
I am happy to be a part of this journey with Dexalot and I am looking forward to sharing more interesting updates and developments with you in the future - to get started, just check out the link list below.
The future is decentralized!
Link List
Website: https://dexalot.com
Twitter: https://twitter.com/dexalot
Telegram: https://t.me/dexalot
Discord: https://discord.gg/S4NP9w7Xwn
Medium: https://medium.com/dexalot
YouTube: https://www.youtube.com/channel/UCCCu7_vWv4oMfI5QnGakArA
GitHub: https://github.com/dexalot
Litepaper: https://dexalot.com/docs/DEXALOT-Litepaper.pdf
Articles: https://medium.com/dexalot
Tutorials: https://medium.com/dexalot