Blockcast.cc Interviews DeGate, Decentralized Exchange Protocol built on Ethereum Layer 2 Technology

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1) Tell me more about yourself and also your founding team.

Hi, this is Ricky, one of the key Technical Contributor behind DeGate. I began researching cryptocurrency starting with Bitcoin, back in 2013, and have since grown into a strong supporter of blockchain technology. I contribute to product development at DeGate.

Hi my name is Alvin, I am the chief evangelist for DeGate. I was formerly in the Ministry of Finance in Singapore, and I also led the China office for Coursera, the education technology unicorn.  DeGate is led by a very strong team of crypto natives from leading projects and companies. BitGulu, our founding member, is an early investor in the Bitcoin and Ethereum Ecosystem. He was the original co-translator of the Ethereum white paper into Chinese, coining the term 以太坊。When Vitalik Buterin first visited China, Gulu was instrumental in helping him reach a wider audience, holding workshops and seminars and even teaching him some Chinese! 

Our team is full of deep talent. Besides the very strong technical team with deep knowledge of Zero Knowledge Proof and other core technologies for Ethereum Layer 2, we also have some strong business and leadership experience. Just to briefly describe, George our COO was a former managerial leader at Chinese internet giant Tencent and founded and sold his own fintech company. David, our CTO, has led over 100 engineers, while Agne, our Head of Communications, was a Director at Binance.

 

2) What is DeGate all about? Tell us in detail, please.

At DeGate, we are building a Decentralized Exchange Protocol, or DEX, built on Ethereum Layer 2 technology. It’s owned by the community as a Decentralized Autonomous Organization, or (DAO). Essentially, we are providing a faster and cheaper way to make trades, especially order book trades, while ensuring that you have control of your own crypto, your own funds. We expect the protocol to encompass a full range of exchange related modules including but not limited to orderbook, Autonomous Market Making (AMM) functionalities, leverage-capabilities, and importantly an L1-L2 bridge. Think of us as similar to binance in functionality, but trustless, in that we don’t have to trust any centralized entity to ensure the security of the funds.

We are currently working on several capabilities that will differentiate us from other decentralized trading protocols.

First, we are prioritising orderbook functionality. This means that users will be able to make trades using an orderbook function, very similar to the operation on centralized exchanges, and not just an Automated Market Maker or (AMM) model.  

Second, we are built and designed for Ethereum layer 2, specifically optimistic rollup technology, and not the Ethereum network layer 1. Many of the current decentralized exchanges are built on Layer 1, and this of course results in very high gas fees. Layer 2 will be significantly faster and cheaper. 

Third, and perhaps most importantly, we are working on our own innovative technologies, such as the Match Node. You can think of it conceptually as a Layer 3 that sits on top of Layer 2, which helps to match makers and takers in the exchange. Only when a match is found, will there be a transaction carried out and recorded on-chain in Layer 2, reducing gas fees significantly. 

 

3) What is the tokenomics behind DG Token?

DG will be DeGate’s native token with a total supply of 1 Billion. DG token is the only utility token in the DeGate platform. The DeGate DAO can collectively make decisions about the DG token. 

For token details, see: https://docs.degate.com/dg-token

 

4) How did your initial Uniswap Offering of DG token go? 

It was a fair launch. We think an important thing for all crypto projects is how they distribute tokens. Good token distribution creates a community. For the DG token, there was no private sale, nor any institutional investor. Everybody could buy the DG token from Uniswap liquidity at the same price of 0.05$. We also subsequently raised 13.3 million USDC in a Balancer Liquidity Bootstrapping Pool (LBP) offering, again open to all.

 

5) At what stage is your decentralised exchange now?

We are working hard right now with building the protocol. We have just completed the design of our order book DEX recently and will be accelerating our development momentum in the coming months. The team is currently researching some new innovations that we have recently discovered in our research, which is a way to combine the AMM and the Initial Token Offering Platform along with our order book feature. We will keep the community updated through our social channels.

 

6) How does permissionless initial offering work?

DeGate is an open protocol which means any token can be listed and transacted on DeGate by anyone, without any operator approval. We will have a standardized initial offering template for use, any projects can utilise it to distribute tokens and perform fundraising.

 

7) Can you share more about your Fast L1-L2 bridge? How are you compared to the rest who are doing almost the same?

Compared with other solutions, the DeGate bridge is cheaper and faster, because it requires less gas to operate. Whereas other bridges use a smart contract, DeGate uses ordinary transactions for our bridge function. It is also much faster because the DeGate Bridge does not need to wait out a 7 days exit period, which is typically the case for projects using fraud-proof in optimistic rollups.

To achieve this, we use a custodian method to implement this bridge, utilising the Curve stable algorithm present in AMM, to better balance liquidity in different layers. In the long term we will migrate it into a non-custodial method.

Please see our medium article for more details: https://medium.com/degate/cross-rollup-liquidity-solution-based-on-low-slippage-amm-algorithm-5074d2f934eb

 

8) “Compliant Fiat Gateway”- Which fiat will be the first on your platform?

This feature is to be created with our partner, and right now they are working on supporting layer 2 of their gateway’s compliance. We will look to launch the fiat gateway as soon as our partner is ready.

 

9) DAO has been widely talked about and widely being abused too. Can you walk us through your version of DAO?

Governance of projects needs to maintain a balance between security and efficiency. Our DAO structure achieves this balance between democratic governance as well as quick and smart decision making. 

To do this, we use a two-tiered DAO system, divided into HOME DAO and Council DAO. 

Home DAO owns and controls the DeGate protocol. Essentially, Home Dao acts like an ultimate repository of decision making controls. However, to ensure fast and effective governance, the Council DAO is entrusted by the Home DAO to manage the day-to-day decision-making.

For further details, please lookup: https://docs.degate.com/degate-dao/governance

 

10) Share an inspiring crypto-related quote for our community users.

“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.” Vitalik Buterin