Decentralized derivatives platforms currently have two main solutions in terms of protocol types:
1. Vault mode represented by GMX, where LP acts as the counterparty for traders, and the trading price is determined by Oracle feed.
2. Order book mode represented by dYdX, with off-chain matching and on-chain settlement.
Although these two solutions are widely adopted in the market, they come with some potential risks. Vault mode is susceptible to Oracle price manipulation, leading to losses, while the lack of transparency in off-chain matching and on-chain settlement in the order book mode poses challenges.
Among the numerous decentralized derivatives protocols in operation, the influence of individual protocols is limited. The entire on-chain derivatives trading market is still in its infancy, with the market landscape yet to be determined. Winning in this competition poses a significant challenge for every existing protocol in shaping the future.
ZKX, a derivatives protocol based on the Starknet ecosystem, also adopts the order book mode. Through differential deployment, ZKX offers users a seamless on-chain trading experience and security comparable to or even surpassing centralized exchanges (CEX). OG Trade and Pro Trade provide various trading options for users of different levels, while ZKX AppChain records all transactions on-chain, ensuring transparency and security. ZKX accounts and Starkway provide new users with a seamless onboarding process and simplified procedures.
ZKX Background Information
Founded in 2021, ZKX’s two co-founders, Eduard and Naman, previously held leadership positions at SOSV, one of the world’s top venture capital firms managing assets exceeding $1.2 billion. The main team members have rich experience from companies like PayTM, Flipkart, and Byju’s, spanning 8 countries.
In April 2022, ZKX received funding from StarkWare (the parent company of Starknet). In July 2022, ZKX raised $4.5 million in seed funding, with investors including StarkWare, HashKey Amber Group, Crypto.com, DragonFly Capital, and Ashwin Ramachandran, a general partner at DragonFly Capital.
By offering gamified trading options, ZKX provides users with a more engaging trading experience, making trading social. With ZKX AppChain, ZKX combines the efficiency of CEX with the self-custody and trustlessness of DeFi, offering broader scalability and high-speed API. ZKX is currently deployed on Ethereum and Starknet, with data showing a trading volume of $2.3 billion in the past 30 days, over 24.6K ZKX accounts created, and more than 2 million transactions, with STRK’s trading volume exceeding $300 million.
ZKX’s protocol token $ZKX TGE is set to launch on June 19th, listing on Kucoin and Gate simultaneously. The first phase of promised airdrops was distributed to users’ accounts on June 17th at 3 PM.
OG Trade & Pro Trade
Typical on-chain derivatives platforms utilize static trading interfaces, limiting users of different levels to the same interface. ZKX innovatively divides trading into OG Trade and Pro Trade to cater to users of varying experience levels.
OG Trade simplifies the trading experience for short-term and swing traders by introducing gamified elements. It offers 30-minute trading competitions and provides visual real-time trading data on the interface, helping novice users gain trading profits quickly.
Profit, loss, and trading volume earn unique gold, silver, and bronze badges, each signifying the user’s value as a trader in the OG trading competition.
Pro Trade is designed for more experienced intermediate and advanced traders, offering all types of orders, complex trading features, public APIs, advanced tools, etc. Professional traders, large capital players, and proprietary trading firms can easily trade on Pro Trade.
OG Trade and Pro Trade meet the needs of different types of traders in two distinct ways. However, users need not worry about liquidity and depth issues as both trading methods share the same on-chain order book in ZKX.
ZKX AppChain Bridging Performance and Security Gap
Some on-chain derivatives protocols use an order book model to enhance performance, such as dYdX, Aevo, etc., but these operate with off-chain matching and on-chain settlement. Off-chain matching lacks transparency and carries a certain risk of malpractice. ZKX bridges the performance and security gap perfectly through ZKX AppChain.
ZKX AppChain, developed using Substrate SDK, seamlessly connects users to ZKX across multiple L1 and Rollup solutions. An intermediate layer in its stack synchronizes assets and state data between Starknet, parallel Rollup built using its SDK, and ZKX AppChain. Therefore, ZKX AppChain is essentially an L3 public chain based on the Starknet ecosystem.
All ZKX order books run on ZKX AppChain, enabling ZKX transactions to remain unaffected by on-chain speed and gas costs. Even during network congestion, ZKX users can enjoy smooth gas-free trading, continuous liquidity, and operability.
On the AppChain, order books and Substrate manage transaction processing and verification, making all transaction records traceable and queryable. This further enhances ZKX’s decentralization and transparency, providing secure and trustworthy on-chain derivative trading.
ZKX has scaled to 3 blocks per second and supports over 2000 API requests every 10 seconds, offering efficient gas-free transactions that rival CEX in trading experience while ensuring asset security for users.
ZKX AA Account
While most on-chain derivative protocols are adopting various strategies to attract new users, the high barrier to on-chain operations is a fundamental reason why new users struggle to transition trading from CEX to on-chain. Lowering the entry barrier for new users and seamlessly integrating them into the decentralized trading system is a current focus.
Account abstraction with a seamless experience similar to CEX while maintaining the security and privacy of DEX is essential for blockchain mass adoption. ZKX is the first decentralized derivatives protocol to integrate account abstraction, utilizing Starknet’s native account abstraction and Starkway as an L1 to L2 bridge. ZKX AA accounts are currently deployed on Starknet mainnet using Cairo 1.0 and will expand to other L1 and more Rollups in the future, providing users with a seamless full-chain trading experience.
Using ZKX AA accounts simplifies the process of recording private keys and fund deposits. As a decentralized account on Ethereum L2, users can seamlessly bridge to Starknet and start gas-free trading directly on ZKX AppChain, eliminating multiple complex steps. ZKX AA accounts will also serve as a one-stop DeFi hub for users, offering staking and other DeFi products in addition to perpetual trading, all within a user-centric DApp.
Starkway Native Cross-Chain Bridge
In the era of multi-chains, cross-chain bridges are vital infrastructure connecting blockchains. Starkway consists of Solidity smart contracts on Ethereum and Cairo contracts on Starknet. Utilizing the L1-L2 message passing mechanism provided by Starkware, Starkway helps users seamlessly transfer funds between L1 and Starknet through a trustless and transparent mechanism.
Currently, users can easily deposit funds from Ethereum L1 directly to ZKX AA accounts on Starknet using Starkway and participate in ZKX activities such as airdrops and clan NFTs. Starkway also features message passing capabilities, allowing ZKX to verify L1 wallet eligibility and allocate rewards accordingly.
Through Starkway, ZKX establishes channels for fund transfers, breaking down barriers between different chains, enabling users to seamlessly access any services provided by ZKX.
In conclusion, the decentralized derivatives trading market is on the brink of a major breakthrough, with the potential for trillions in growth. The overall landscape of on-chain derivatives protocols is still evolving, providing valuable opportunities for innovative projects and a critical moment for capturing market share.
ZKX’s core advantage lies in its adoption of decentralized order books, offering high performance and liquidity, combined with ZKX AppChain and ZKX AA accounts, enabling full-chain users to securely and seamlessly access ZKX services. Providing users with a smooth and gas-free trading experience comparable to CEX while maintaining the security and decentralization of DEX.
Through unique differentiation strategies, ZKX is dedicated to addressing the issues and risks in existing protocols, positioning itself as a strong competitor in the decentralized derivatives race. ZKX token is set to start trading on June 19th, with a total supply of 1 billion tokens, initial circulation is limited, with an IDO valuation of $50 million, making it a project worth watching for potential price movements.
