From the past to the present, the crypto industry has faced many centralized exchange hacks/ insolvent from the biggest hack of Mt Gox in 2014 to recent liquidity crisis of JPEX exchanges. This begs the question - why do users still entrust funds to CEX custody given the risks? The most likely answer is lack of compelling decentralized alternatives at the time.
Decentralized exchanges (DEXes) first emerged in 2018 as innovation accelerated, but meaningful adoption was still nascent. This began to change in early 2020, when protocols like Uniswap grew traction through their AMM model. Other perpetual DEX models also saw growing adoption while aiming to offer trading experiences more similar to CEXes. DYDX leveraged a centralized order book integrated with non-custodial wallets. Meanwhile, GMX v1 attracted large traders by offering zero slippage during trading.
But the fact is that the DEX to CEX future trading volume is still around 1.3%, which is quite low when compared with the DEX to CEX spot trading volume (around 15%). Most users still prefer CEXes due to higher liquidity and a wider range of trading pairs. However, incidents like FTX have made many crypto users realize the importance of self-custody for protecting funds. This has raised the question: what if we could combine the abundant liquidity of CEXs with the self-custody of DEXs?
This is the vision behind GRVT, a hybrid exchange that offers the best of both worlds. GRVT allows users to trade using self-custody wallets, while also providing the high performance and liquidity typically found only on CEXs. GRVT offers several promising features:
Self Custody trading and easily on - board new users: for new users, they can easily get started by registering with their email, and GRVT will automatically set up their wallet. They do not need to remember a private key or seed phrase. For existing users, they can freely connect self-custody wallets for trading. This allows users to have full control over their accounts and reduces the vulnerability to potential exchange failures.
High-Performance Orderbook and matching engine: GRVT has an off-chain Central Limit Order Book (CLOB) that enables order matching at speeds up to 600,000 transactions per second with latency as low as 2 milliseconds. This high-performance system provides users the same experience when trading on CEXes.
One-stop shop for all derivative products: GRVT allows both users and institutional traders to trade perpetuals, options, and Request for Quote ( RFQ ) . By leveraging Validium technology, all transactions on GRVT are "shielded" to ensure that each user's positions are not revealed to the public. This will provide a wider range of products for users and protect them from front-running and market manipulation.
With the support from Matter Labs - the team behind ZkSync - and under the adept leadership of Hong Yea, Aaron, and Matthew, GRVT's innovative approach promises a transformative user trading experience. At Vamient, we are excited and proud to endorse and support this visionary endeavor. We are proud to support liquidity efficiency at GRVT and will be deploying both taking and making strategies.
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