CEXes like @cz_binance have monopolized crypto for ages.
It’s a market more massive than LSDs
This one DEX will dethrone all CEXes with CEX-like UX, massive technology, and truly open-source.
Backed by big names like @PanteraCapital @coinbase @Delphi_Digital 👇🧵
I am awesomely bullish about @Chainflip’s because it is paving the way to a truly omni-chain future for DEXes and that includes BTC as well.
1️⃣About @Chainflip
2️⃣How will @Chainflip achieve CEX-like UX
3️⃣How it works
4️⃣Core Driving Mechanisms
5️⃣Users of Chainflip
6️⃣Tokenomics
7️⃣Investors and Conclusion
If you attempted to read its docs, I hope you survived because my eyes got killed.
It blew my mind with the level of deep technicalities there, and I will break that all down into what it means for you as a user and for the future of “France” (I mean’t crypto here)
Admist all that tech talk in their docs, which I personally find it amazing but at the same time overwhelming, I have condensed them into insights that are relevant for and would make sense for an investor and to-be-user of Chainflip
So here goes….
1️⃣About @Chainflip
It's a cross-chain Automated Market Maker (AMM) that allows users to swap native tokens directly across different blockchains.
Basically, its @Uniswap V4 + CEX features
These just blew me away👇
2️⃣How will @Chainflip achieve CEX-like UX
📌You don’t need a wallet
This was my biggest painpoint when I first started out crypto. And this feature will pave the way for increased adoption in DeFi.
Initially, users will be able to connect with MM and integrations with more wallets to follow. You can just enter in the addresses and perform a swap!
📌No custody risk, you own your keys
Send one on-chain transaction for a fully executed trade.
Everything is fully transparent on-chain. Chainflip doesn’t need any deposits, withdrawal process or approvals, no exchange custody risk.
📌True cross-chain infrastructure
Users would be able seamlessly swap and/or bridge assets between chains with a single click, just like how they have been doing it with CEXes.
Chains like BTC, EVM, non-EVM would be available on Chainflip. You read it correctly, literally BTC and other non-EVM chains like Sui, Aptos, Polkadot, Kusama, Solana, Cosmos, Sei and so on.
They will launch it step by step with chain interoperability between BTC<>ETH & DOT<>ETH first. Then, quickly expanding into APOTS, SUI, SEI.
📌Chainflip can support ALL assets
It's very good to know, and it goes to show the team’s capability and that they can play out their cards masterfully here.
From a technical perspective the Chainflip’s team is capable of integrating all assets. But strategically, it won’t be wise to integrate all of it due to the constraint of resources.
📌User governed protocol
Users can easily participate in the running of the underlying protocol, as users, liquidity providers, builders, or through governance.
📌It will be HUGE if Chainflip integrates with DEX aggregators
What this means is that Chainflip will be one true aggregator of DEX aggregators. Their liquidity will be driven by Chainflip
📌Slippage lower than CEXes
This is achievable with on-chain liquidity incentives, even for larger trades
Amidst all these features, which sounded too good to be true, understanding how all these gel together will give you a better insight
3️⃣How it works
Users have all loved CEX and fed it as a growing predator in crypto. Chainflip works the same way, if not better!
Imagine you are trying to swap $BTC to $ETH on Binance.
First, you send $BTC to one of Binance’s wallet BTC deposits.
Once the balance has been registered on Binance, the user can interact with the trading system to buy or sell their preferred assets.
And when you want to withdraw your $ETH, Binance will send it out of their wallets, depending on what blockchain your withdrawn asset is based on.
This used to work only on CEXes centralized. With Chainflip, it works better with:
No KYC
Your wallet, your keys
Lower slippage
No intermediaries (using 150 validator instead))
Decentralized node operators and governance
4️⃣Core Driving Mechanisms
🔹Just-In-Time (JIT) AMM
Traders favour CEXes alot more because of their price efficiency.
With Chainflip’s JIT, it aims to displace all other AMMs and CEXes with better pricing through a unique approach with liquidity provision.
Traditional AMMs expose LPers to impermanent loss risk. The JIT AMM allows market makers to provide single-sided liquidity on any tick (not only a range!), effectively removing the risk of impermanent loss.
This radical approach should lead to immensely efficient capital allocation and an impressive swapping experience for users.
🔹Miner Extractable Value (MEV)
The current problem with MEV is that it often leads to front-running, which can harm users. Chainflip is flipping that narrative and integrating MEV as a key feature that will benefit users instead.
Instead of users being front run by MEV seeking bots, Chanflip naturally incentivizes liquidity providers to front-run each other to benefit the user.
This ensures that users are always getting at least market pricing or better.
5️⃣Users of Chainflip
There are 3 groups of users here:
🔹Traders
Connect wallet and swap ETH to BTC
The platform underlying oracle will do the rate conversion
You get your BTC in seconds
No bridging and all actions done through the same wallet you connected
🔹Liquidity Providers
Deposit into Chainflip liquidity pools.
With more liquidity deposited, the more trading fees you will earn.
🔹Node Operators
In Chainflip's Advanced Validator Operator Scheme, we will be selecting up to 100 community members to run up to 100 nodes to a professional standard.
The program will run from now until the end of August, 2023. Each participant will be eligible for a 555 FLIP (yes, real FLIP this time) payment per validator they operate successfully for the duration of the program.
Probably not relevant already but its good to know
https://blog.chainflip.io/smooth-operators/
6️⃣Tokenomics
$FLIP is the native token on Chainflip’s own blockchain and will be used for:
Collateral for Validator auctions.
Liquidity Provision and Relaying services in order to process instructions on the DEX
Its still tokenless now so I am sure there are ways to earn $FLIP 👀
7️⃣Investors and Conclusion
Backed by the best in crypto.
Atomic swaps might be a thing again.
What Chainflip aims to do here is to bring a better experience when building on benefits of DEXes. Giving rise to cheaper and easier ways to have cross-chain swaps with native tokens seems. It will pave the way towards mass adoption
Last but not least an alpha for you!!
Chain also have its own liquid staking version called stFLIP
The Testnet will guide you on how to stake FLIP and win a limited edition OAT!
https://twitter.com/Chainflip/status/1676963478542909440
Thread: https://twitter.com/arndxt_xo/status/1676977517109059584