The market focus returns to the leading DeFi projects. Will trading tools such as DEXTools, UniTrade, Hummingbot, and OctoFi become the next outlet?
Written by: Karen
Entering 2021, the crypto market seems to show no signs of retreating from the craze at the end of 2020. With the advent of a new round of general rise, the transaction volume of decentralized exchanges in January has once again greatly rewritten the original historical record. The trading volume has exceeded 50 billion U.S. dollars, and the total number of DEX users has exceeded 1.18 million. The balance of the cryptocurrency trading competition has once again begun to tilt towards DEX.
Monthly trading volume of each DEX, source: Dune Analytics
However, because of this, the problems of mainstream DEX such as not supporting limit purchases, inability to view the order book, low liquidity of some tokens, and poor experience have become more prominent. Especially for those relatively professional market participants, the current DEX trading experience or the so-called infrastructure, compared to various assets in the traditional financial market, and even centralized cryptocurrency exchanges, is still very “simplistic” “.
In response to this industry’s pain point, there is currently a class of tool applications in the DeFi world that are designed to enhance users’ trading experience in DEX. Although these applications are not perfect, they have already made more complicated plans for users in DEX transactions. Execution and data analysis provide the possibility. In today’s increasingly fierce competition on the DEX circuit, the “toothpick birds” in the mouth of these “crocodile” are likely to contain the next market “explosion”.
DEXTools: An intuitive DEX data visualization tool and trading assistant
DEXTools is not only the ” Information Treasure Box ” of DEX, it also integrates trading robots . The goal of DEXTools is to display the data provided by the decentralized exchanges IDEX and Uniswap and even all APIs and blockchains to users in the most intuitive form in real time, including the listing of tokens on DEX and the creation and removal of fund pools. The liquidity data of the fund pool and wallet query, etc., also provide access to token purchases and liquidity, thereby helping traders improve transaction efficiency and make better decisions.
DEXTools was founded by two co-founders, engineer Javier Palomino and trader Frederic Fernández. The team’s development progress is also relatively rapid, basically following the project development roadmap. The beta version was released in April 2020, the MVP (the most simplified practicable product) and the official launch of the project were released in June, and its token DEXT was listed on the exchange. , The DEXTools V1 version was released in October, and the trading robot “Velox Algorithmic Trading Bots” was integrated at the end of December, allowing traders to automatically execute real-time, non-custodial trading strategies while saving Gas fees.
Currently, the DEXTools application provides trading tools for Uniswap V2 and IDEX 2.0 (upgrading), and will later support SushiSwap, MoonSwap and KuCoin.
Among them, the trading tools provided for Uniswap include Pool Explorer, Pair Explorer, Big Swap Explorer, MultiSwap, and wallet information (coming soon).
In the fund pool browser , users can view the addition or removal of the fund pool liquidity of different tokens on Uniswap, and they can also view the latest currency listing information in real time, as well as obtain the price, increase or removal of the currency at the time of the transaction. Very intuitive data such as the number of tokens and the number of ETH, the changes in the fund pool before and after the transaction, and the number of ETH in the fund pool after the transaction. Users can also use the token filter to view all fund pool activities of a token, and can jump directly to Uniswap’s purchase page and Etherscan’s transaction information page.
The transaction pair browser provides real-time transaction and data information for tokens. It can not only view basic information such as total liquidity, daily transaction volume, total transaction number, K-line chart, etc., but also add interested transaction pairs to the collection Folder, and view the project reliability measurement index DEXT Score (1–99) based on the algorithm and 16 parameters. The higher the score, the more reliable the project.
The large exchange browser can view the latest large-scale transaction activities, and can also filter by token or amount.
In addition, traders can also capture all tokens on IDEX in real time, check the sale of tokens, obtain tokens with the largest spread, search the real-time order book and transaction history of any trading pair, the flow of ETH in IDEX, and save, Compare and search the wallet of any user.
These trading assistance functions will help real-time insight into the market and make efficient trading decisions, as well as spread arbitrage through these visual data.
UniTrade: a limit order execution platform based on Uniswap liquidity pool
UniTrade is a decentralized trading platform based on the Uniswap liquidity pool. Its core function is to support limit orders and intelligent trading.
UniTrade is a decentralized trading platform based on Uniswap liquidity pool. Its core function is to support limit orders and intelligent trading.
The main team members of UniTrade are anonymous . The team started V1 version and UniTrade pledge rewards, open source “Order Miner”, release information website and V2 version in October last year.
At present, UniTrade provides users with a variety of Uniswap trading tools, including support for limit orders, real-time order books, K-line charts, real-time depth charts and other basic data, as well as intelligent trading and liquidity management services. In other words, users can use the UniTrade platform to set specific parameters to automatically repeat order operations, or set thresholds to add or withdraw liquidity pairs from the Uniswap pool to maximize profits.
In the above figure, when you purchase tokens through UniTrade, you can purchase limit orders or market orders, and the right side will also update the transaction history data and pending transactions of the token in real time.
Hummingbot: Quantitative Strategy Trading Tool
Hummingbot is an open source and free digital currency quantitative strategy trading software that can not only provide quantitative high-frequency trading strategies for retail investors, small and medium-sized trading companies or funds, but also provide liquidity for digital currencies and the exchange itself.
Hummingbot was launched in 2019 by CoinAlpha, a crypto asset investment institution, with the original goal of providing liquidity for long-tail assets. CoinAlpha was founded by Michael Feng and others in 2017 and is located in Mountain View, California. It has received investment from Bain Capital Ventures, Borderless Capital, Collider Ventures, 1kx Capital, Ironfire Ventures, SharesPost, and Stanford-StartX. Michael Feng graduated from Stanford University and worked at JP Morgan and Citi. Taiyang Zhang, CEO of Republic Protocol and John Wu, president of Ava Labs, are consultants to CoinAlpha.
Hummingbot takes a multi-pronged approach to provide services to traders, exchanges, developers, and token issuers. For traders, four strategy templates of Hummingbot can be applied, namely market making, arbitrage, cross-trading market making, and automatic market making (AMM) arbitrage . The market-making strategy is that Hummingbot continuously releases limit buy orders and ask orders in one market. Arbitrage is buying low and selling high in two markets. Cross-trade market making combines the two strategies of market making and arbitrage. In addition, traders can also participate in other projects’ DeFi liquidity mining activities through Hummingbot.
Developers can customize trading strategies, scripts and exchange integration, and can also contribute to the community. In addition, exchanges and token issuers can provide liquidity and liquidity mining services to their users through Hummingbot.
At present, Hummingbot interacts with the APIs of nearly 20 exchanges such as Binance, Coinbase Pro, Huobi, dYdX, etc. through Connectors , such as collecting order book data and sending and canceling transactions. In addition, Hummingbot also supports The three protocols tested (Balancer, Terra and Uniswap) currently also support liquid mining projects such as Algorand, Avalanche, Frontier, NEM and Secret Network.
OctoFi: DeFi dashboard investment product
OctoFi is a DeFi dashboard investment product, similar to a DeFi aggregator, which provides direct transaction, governance and portfolio tracking services for users of multiple DeFi projects and agreements through an integrated solution.
Similar to UniTrade, the OctoFi team also chose to remain anonymous. However, OctoFi mainly attributed this to decentralization, including not relying on the founder’s reputation, developing the community, etc. The services provided by OctoFi are as follows:
- DeFi field and legal currency provide access to gold, including support for nearly 40 legal currencies such as USD, GBP, INR, EUR;
- Support direct transaction services, including spot transactions (under testing), direct in-app exchange transactions through Uniswap, and support for viewing wallet asset amounts and liabilities and other information;
- Aggregate 32 exchanges, which can help users get the best rate from them;
- Support derivatives trading services (under testing), among which, margin trading is up to 5 times leverage, and perpetual contracts are up to 10 times leverage;
- In the investment sector, support for adding liquidity to the fund pool, summarizing other lending agreements (under testing), and integrating NFT market (under testing);
- Support users to participate in the governance of hundreds of projects supported by Snapshot, explore various investment opportunities, and market-making price limit management.
Income and token economic model comparison
The development of DEXTools is mainly funded by sponsored projects and advertising revenue. In addition, DEXTools does not open all functions to users for free. Its user subscription system has been updated and simplified many times. The latest version was released in November 2020, opening three types of services for users holding different amounts of tokens. The subscription fee is DEXT worth 0.3 ETH, and users who hold at least 5000 DEXT can enjoy a 50% discount.
Free version : Provides real-time charts, fund pool browser, trading pair browser, Big Swap Explorer, Multiswap, 1 minute hot pair delay, USDT/DAI pairs (coming soon) and other DEX integrations (coming soon) .
Standard version : Must hold 20,000 DEXT or subscribe. In addition to the functions supported by the free version, it also provides wallet information, price reminders, real-time hot trading pairs, no ads, price monitoring (coming soon), and other functions or Features.
Premium version : You must hold 100,000 DEXT. In addition to the functions supported by the standard version, you can also access the exclusive DEXT Force community and the shared income dividend model DEXTShares.
According to the official page, the current total supply of DEXT is 170 million, of which 50 million will be allocated to the team, team development and operation. Starting from January 1, 2021, 1,000 will be released every 3 months. However, DEXTools explained that these released tokens belonging to the team do not mean that they will be sold directly to the secondary market, but may be used to help development, trading, and marketing.
In addition, according to the token economic model updated by DEXTools in July, the DEXTools team will initially destroy 50% of the subscription fee income at the end of each month until a total of 20 million pieces have been burned. After that, it will continue to burn 10% of the subscription fee at the end of each month . % , Which means that DEXT is essentially a deflationary token. Of course, as the supply decreases, DEXTools will adjust the subscription fee.
UniTrade’s token name is TRADE, which is also a deflationary token with a total issuance of 50 million. Transactions on UniTrade need to pay a portion of ETH fees. 60% of these fees will be directly purchased from the Uniswap TRADE/ETH pool and burned . The remaining 40% will be rewarded in the form of ETH to users who pledged TRADE on the UniTrade platform. , The pledged TRADE can only start to receive rewards after being locked for 30 days. As of January 29, the total amount of TRADE pledged was 398,5169.
OctoFi is currently planning to distribute platform fee income to its OCTO token holders. The total supply of OCTO is 800,000. In September 2020, 125,000 OCTO tokens have been allocated through the bonding curve, 275,000 project reserve tokens have been allocated to the transparent project fund, and two more 200,000 tokens will be allocated to interest-bearing projects and early investors.
It can be seen that DEXT and TRADE are both deflationary tokens. The difference is that DEXTools charges a service subscription fee, while UniTrade charges a transaction fee, but the collected fees will be partially destroyed to empower the tokens. OCTO directly distributes fee income to token holders.
In addition, Etherscan data shows that as of January 29, DEXT has 4,373 holders, with a fully diluted market value of approximately US$19.4 million. TRADE and OCTO have 5,843 and 3,611 holders, respectively. The fully diluted market value They were 7.62 million US dollars and 46.07 million US dollars.
At present, Hummingbot has not issued any currency, and it is not clear whether there is a currency issue plan.
Project roadmap comparison
DEXTools and Hummingbot have not yet released a new year roadmap. However, according to the official page of DEXTools, SushiSwap, MoonSwap and KuCoin will be supported in the near future.
According to UniTrade ‘s development roadmap, UniTrade will support more functions on the front-end page in 2021, including stop loss, support for trading rebase tokens, slippage settings, gas optimization, application integration and refactoring, adding smart contract upgrade functions, etc. In terms of smart contracts, UniTrade will launch its current order application on the Binance Smart Chain in the near future, adding support for custom gas fees, chart drawing, and integration of more APIs.
According to the roadmap released by OctoFi , support for claiming platform fees will start in February, adding a transparent dashboard including total platform transaction volume, lock-up volume, number of transactions, etc., support for website query and preparation without connecting to a wallet Spot trading services.
In March, OctoFi will support address management without connecting to the wallet. In April, Android applications and desktop applications for Linux, Microsoft and OSX will be released and support Ethereum 2.0 pledge. In May, gas transaction costs and custody will be optimized. The OTC chain exchange solution, in the fourth quarter, built an oracle aggregator that can aggregate data from multiple DeFi oracles. In December, the NFT trading interface was added and a new 2.0 front-end was released.
OctoFi roadmap, source: OctoFi document
summary
Currently, trading tools are gradually moving towards a stage of differentiated competition. DEXTools is more inclined to provide an intuitive and interactive DEX data visualization tool, which helps traders analyze DEX data in multiple dimensions, thereby improving transaction efficiency. And UniTrade’s main focus is a limit order execution platform based on Uniswap liquidity pool. Hummingbot mainly provides high-frequency trading strategies, as well as liquidity for digital currencies and the exchange itself. In contrast, OctoFi is an aggregator product dedicated to providing data and information gathered together from multiple DeFi projects.
In the long run, trading tools that complement the advantages of DEX are expected to set off a new wave of competition and promote the acceleration of the DeFi field to mature.
