Dive into ZK-Rollups and the DeGate Trading Experience!
Trade BTC, ETH, AVAX and other top cryptocurrencies with up to 30x leverage directly from your wallet (& save on fees using our link HERE)
DeFi Slate Fam:
In this article we’re looking at DeGate. A decentralized exchange protocol built on Zero-Knowledge technology.
First things first. What is zero-knowledge technology?
“Zero-knowledge rollups (ZK-rollups) bundle (or ‘roll up’) transactions into batches that are executed off-chain. Off-chain computation reduces the amount of data that has to be posted to the blockchain. ZK-rollup operators submit a summary of the changes required to represent all the transactions in a batch rather than sending each transaction individually.” More can be found here.
ZK-rollups allow for magnitudes greater efficiency and scalability for the blockchain ecosystem. This makes DeGate an interesting project to keep an eye on as we see adoption of zk tech amongst the broader ecosystem.
In today’s piece we highlight DeGate and walkthrough the trading experience!
What Makes DeGate So Important?
3 of the main design principles of DeGate:
Let’s jump right into its biggest feature that separates DeGate from other DEXes. One of the fundamental reasons which separates DeGate from the other DEXes is that most of the DEXes on Ethereum are of an AMM model while DeGate DEX is of an order book model. DeGate DEX is one of the first to have a permissionless listing feature on a high TPS orderbook DEX on Ethereum. So what exactly does this mean? Basically, this means anyone can list any token they want simply by adding a smart contract address. DeGate aims to “Serve the underserved” by targeting and working alongside projects with strong purpose and communities.
→ Costs a lot to list on CEX, 300k-500k for example
→ Uniswap slippage is 15-20% for new projects. AMM model is currently inefficient as a mode of exchange
DeGate aims to serve this group of solid projects and their communities. In the backdrop of recent events “Not your keys, not your coins”, DeGate strives to build the next generation DEX which will be the main mode of exchange in the market, esp on Ethereum
Another design feature in DeGate’s ecosystem is its Trustlessness. It has a unique design where there’s no central authority with power to access a user’s assets. This entire protocol has no AdminKey, which means that the code cannot be changed once the smart contract has been deployed! If any mandatory withdrawal has not been processed for more than 15 days, anyone can trigger the exodus mode in order to withdraw their funds.
The last design feature would be decentralization. DeGate states that the main long-term goal is to create a truly decentralized protocol with open source functionality and no one will thus be running the service. For now, as a start, they are using a single operator.
In general, this will bring faster and cheaper trading experience that is secured by Ethereum.
A Zero-Knowledge Orderbook based DEX
Gas fees are a major concern on the Ethereum mainnet. Conventional AMM DEXes incur high gas fees on Ethereum and provide only market orders, where traders have to accept the current market price for a trading pair. DeGate DEX showcases the key features of a new type of protocol based on Zero-Knowledge (ZK) rollups which allow for spot trading through limit orders, similar in experience to a centralized exchange (CEX). The DeGate protocol powers a “match node” matching orders between traders on its own L2 block, periodically recording the transactions on Ethereum Mainnet via ZK technology.
DeGate builds on and improves upon the important work of Loopring Protocol, an existing ZK rollup for trading and payment. DeGate has added key new features such as:
- Permissionless listing
Any token can be listed in a permissionless manner through an open listing mechanism on DeGate DEX
- Grid trading feature
DeGate offers a grid trading feature for traders to trade the ups and downs in a particular trading pair. This feature is common in centralized exchanges and DeGate is pioneering this feature in a DEX, ensuring traders have full custody over their assets at all times
- Gas Saving Deposit
Depositing into a DEX protocol often incurs a high one-time fee. DeGate has pioneered gas saving deposit option. This option is based on a “simple transfer” rather than a “contract call” when making a deposit to trade on DeGate. This method can reduce the one-time gas deposit fee by up to 75%!
- Efficient Sustainable Gas (ESG) technology
Pioneered by the DeGate team, this ensures significant gas savings while maintaining a decentralized protocol.
Simple walk-through of getting testnet tokens
Let’s take this step-by-step shall we?
- Go on the official DeGate testnet website and connect your metamask wallet.
- Press on the blue button that says “Register Account” and switch to “Rinkeby Network”
- Get Rinkeby ETH from these faucet sites:
4. The team wanted to make DeGate users’ experience more friendly, so they decided to airdrop 200 USDC and 200 USDT upon their first deposit.
Important Note: “There are no requirements on your first deposit, all token deposits will be eligible for the free 200 USDC AND 200 USDT test tokens. The stablecoins will be sent to your wallet via DeGate internal transfer mechanism almost instantly after the completion of your first deposit.”
Overview of DeGate Decentralized Account
What differentiates DeGate DEX from others?
Main key points:
- Deposit/Withdraw – fees can be paid in ETH/USDC/USDT
- Internal Transfer mechanism
- Security – where you get your trading key API and trade via 3rd party automated systems too
Spot trading (limit orders, decentralized)
Everyone can agree that gas fees on the Ethereum mainnet are a major concern, but that’s not the only concern.
Other concerns on traditional AMM DEXes
- High gas fees
- Provide only market orders
- Traders have to accept current market price for a trading pair
- Potentially high slippage
This is where DeGate comes in like the savior of the day with a new protocol based on ZK rollups and just like in a centralized exchange it allows users to use spot trading through limit orders. The protocol is built in such a way that fees are low for takers of trades and free for makers of trades.
Grid Trading feature
Honestly, this feature should be on every single DEX. A grid trading feature is such an important tool for traders that it shouldn’t be optional since it allows its users to apply different trading strategies based on price fluctuation in any trading pair.
Another very interesting feature that DeGate offers is the ability to list any token permissionless-ly. You only need to pay small gas fees to confirm its listing.
Permissionless listing is not easy to implement though, especially in a public protocol. It is no secret the challenges that exist with permissionless listing features. Some of these existing challenges involve both economic and functional security issues. This is the main reason why we see very few other DeFi protocols supporting this feature.
For economic security: DeGate employs a complete gas fee calculation mechanism. To ensure the sustainability of the protocol, gas-related fees will need to be charged to ensure data availability and to perform on-chain transactions on the mainnet.
For a better user experience: Multiple currencies are supported for gas fee payment and can be combined to fill actual orders placed. A rigorous mechanism of economic security will be implemented to ensure that the protocol will not be abused even as an open system.
DeGate is an open protocol in which its design is based on 3 main features
-> Limit orders, decentralized
-> Unique decentralized grid trading
-> Permissionless listing
A orderbook based DEX built on ZK rollups, secured by Ethereum. A protocol which enables users to participate in DeFi while ensuring self custody of assets at all times!
🙌 Together with:
It’s officially time to start testing the first version of Synonym. Break things, provide feedback, and of course, get rewarded.👉🏽 Here
Off-chain governance. On-chain execution. Optimistically execute governance transactions on-chain where your community can approve them. Check it out Here!
The Rollup Report 📰📊📈
⚠️ DISCLAIMER: Investing in cryptocurrency and DeFi platforms comes with inherent risks including technical risk, human error, platform failure and more. At certain points throughout this post, we might get a commission for promoting certain projects, if this is the case we will always make sure it is clear. We are strictly an educational content platform, nothing we offer is financial advice. We are not professionals or licensed advisors.