There is no doubt that DEX has become a major track in the crypto field. Decentralized exchanges are like a rainbow, and investors are having fun. However, expensive gas fees, slippage, impermanence losses and transaction speed have become the important factors hindering development.
If the transfer fee can be reduced and the slippage can be solved without causing any damage, it will undoubtedly be an innovation on this track and a breakthrough for development.
This NGKEX project has been doing such things, and it has been successful. A few days ago, the launch of NGKEX brought heat and topics in the industry, and many investors have begun to pay attention to the rising star of this DEX track. Next, we will analyze the highlights of the NGKEX in detail and the areas worthy of attention in the future:
1. PMM mechanism: innovation and reconstruction of AMM mechanism
The AMM mechanism is the soul design in DEX and the main foundation, following the formula X*Y=K (constant value). For example: 1 Ethereum and 1000 LINKs are used to provide liquidity, then in the theory X*Y=1000, 1000 is a constant value. After market adjustment, when the number of Ethereum on hand increases, the number of LINK is relatively reduced, but the price of LINK has risen relative to Ethereum, and the price of Ethereum has fallen relative to LINK. In other words, the price of LINK will increase linearly with the quantity sold, that is, the current DEX generally describes the liquidity relationship through a linear relationship. This is a contrary to the fact that most of the liquidity in the real market is concentrated in the middle price of the market. Therefore, the linear description based on AMM cannot truly reflect the price distribution of the market, which is also the source of slippage and impermanence.
After in-depth study of the AMM mechanism, NGKEX created a non-linear PMM mechanism. It transformed the linear relationship that reflects the price relationship into a non-linear relationship, which is more in line with market laws, more truly and objectively reflects the liquidity of DEX. The PMM is a general liquidity algorithm framework. The price parameters introduced in PMM can be obtained from oracles, provided by market makers, or evolved into AMM mode. The NGKEX feature can imitate the behavior of human market makers by introducing price parameters and continue to buy low and sell high near the mid-market price to make the market. With this measure, more funds can be distributed near the mid-market price, thereby improving the utilization of funds and effectively avoiding slippage, which is extremely friendly to users.
2. High-speed based on NGK, 0 gas architecture
During the construction of NGKEX, it adopted an innovative architecture and consensus of tree graph, without sacrificing the decentralization and security. It adhered to the foundation of the DPOSS mechanism, increased the throughput to 6000TPS. It is basically equivalent to the centralized Visa network, and its handling fee is far better than other projects. Its confirmation can be completed within 1.5 seconds, and the security level of this confirmation is equivalent to 6 blocks of Bitcoin, or 30 blocks of Ethereum. This greatly reduces gas fees and improves user experience.
In summary, the NGKEX project is injecting fresh blood to the DEX track. At the same time, it gives the market greater freedom through innovation, improving the user experience and bringing new opportunities for the development of this field. Therefore, the first dark horse of the DEX in 2021 is certainly NGKEX.