Decentralized exchanges have an interesting and brief history. EtherDelta, Uniswap, 1 Inch, SushiSwap and now Zero Exchange. And this DeFi wave continues to grow, EtherDelta had traded 241 different tokens at its peak, Uniswap has a market capitalization of USD 5 billion and after 4 weeks since the announcement, Zero Exchange has already attracted over USD 60 million in volume and 8000 users before the mainnet even started.
Zero Exchange has emerged as the next decentralized exchange after Uniswap, but without the transaction fees. Zero Exchange is built on the low-cost blockchain for fast finalization of the Avalanche network and uses Chainsafe’s chainbridge solution to make all of this possible.
As the first decentralized exchange for avalanche blockchain, Zero promises an end to the ever-increasing fee problem that merchants at Uniswap and Sushiswap are currently facing – the two largest DEXs in DeFi, both of which are plagued by the growing transaction fees from Ethereum.
Merchants are moving in waves of Uniswap and Sushiwap, fueled by the “no-fee” approach to Zero Exchange and its familiar user interface. The volume has grown exponentially, reflecting the ease of swapping one cryptocurrency for another.
The response from the community was positive: “Each trade with Uniswap costs US $ 30 in fees.” This is the number one reason why users zeroed out.
The liquidity for the decentralized exchange takes place via crowd sourcing. The users put their coins in a virtual pool managed by a smart contract. With Zero Exchange, they’ll earn up to 29,000% APY (variable) under Zero’s Liquidity Mining Program, which allows people to add their $ ZERO and $ AVAX to the pool as a form of passive income generation. After completing the premium incentives, liquidity providers are entitled to the swap fee of 0.3%, which has enabled many users to double-dive into the ETH and AVAX pools with compounding.
The team behind Zero Exchange is anonymous, as is the identity of their relays (the nodes that enable cross-chain exchanges). When asked about the reason for the anonymity, a representative from the Zero team said, “We think the DEX needs to speak for itself at this point in DeFi.”
Despite the questions of who is behind the project and who is supporting it, Zero Exchange has not raised any money. The team funded everything out of pocket, including an Ethereum air drop for its ZERO tokens and an AVAX air drop to introduce people to the new Avalanche blockchain.
Zero Exchange is currently the only Avalanche DEX with future plans to include stop orders and charts for the second quarter as part of its third blockchain integration with Polkadot. We’ll follow this story further as Zero Exchange evolves into a new generation of decentralized exchange with the promise of cryptocurrency swaps across three separate blockchains.
