Project highlights
1.Introduction
ICPEx is a full-chain decentralized exchange powered by the Proactive Market Maker (PMM) algorithm and is committed to becoming a decentralized financial hub serving Web3. Both the front-end and back-end of ICPEx are deployed on the ICP(Internet Computer). It will provide efficient on-chain liquidity for Web3 asset trading activities, allowing every Web3 user to conveniently issue and trade assets.
2.Project Origin and Goals
(1)Current status of DEX on Dfinity
· The structure of some Dex is an intermediary custody method with a centralized fund pool.
· Liquidity pool information is not transparent enough.
· The interaction process is complex. For example, a swap process requires multiple steps to run.
· It is not friendly to users to create new tokens, which will not be conducive to the prosperity of the DeFi ecosystem.
(2)Our planned implementation method and development direction of dex on dfinity
· A non-middle-managed liquidity pool, transparent liquidity pool information, simplified interaction processes.
· Friendly for users to create new tokens and prosper the long-tail market.
(3)Goals of ICPEx
· Short-term goal: Leverage the long-tail market effect to drive the development of the IC Defi ecosystem.
· Long-term goal: Use IC’s chainkey and other technologies to realize multi-chain exchange and achieve siphoning into the ecology of other mainstream tokens.
3.Product features formed by ICPEx to achieve the above goals
(1)Feature 01: Full-Chain Program
The management modules of ICPEx are all executed by decentralized on-chain contracts, including modules such as Web assets, Token management, Exchange Router routing, and Oracle.
(2)Feature 02: PMM Algorithm
ICPEx has implemented the PMM (Proactive Market Making) algorithm within its router canister, PMM provides more accurate price discovery and liquidity management. It enhances capital efficiency by dynamically adjusting fund allocation and slippage, thereby improving the utilization of capital. Moreover, PMM is adept at catering to both high and low liquidity assets with its adaptive capabilities, surpassing the AMM model in various key aspects.
(3)Feature 03: User-Controlled Liquidity
Users have control over liquidity pools, distinguishing from the typical liquidity custody model. The tokens in this pool are the actual tokens owned by the pool itself and are fully controlled by the pool, rather than being aggregated in a unified token account.
(4)Feature 04: Smart Swap Router of ICPEx
Smart swap router assist users to choose the best ratio for trading among multiple pools of the same token pair.
(5)Feature 05: Multi-Type Liquidity Pools
<1>Public Pool Standard Mode
In standard mode, fund allocation is similar to Uniswap, allowing you to set the fee rate and volatility coefficient. Token price is determined by the liquidity of both parties.
<2>Public Pool Single-Token Mode
The Single-Token mode can raise funds by selling tokens and does not need to prepare buyer liquidity to start providing liquidity.
<3>Private Pool
Private Pool can only have liquidity added by the creator and are intended for market makers.
<4>Anchored Pool
The price curve of Anchored Pool is similar to Curve and is suitable for synthetic assets.
(6)Feature 06: Token Creation with One-Click
<1>No code required
<2>Optional ICRC-2+, DIP20+ protocols
· Naturally compatible with ICRC-2 and DIP20
· Customizable burning for deflation
· Optional additional issuance of assets
· Relinquishable ownership
<3>The service fee is only 1U
How is it built
The project is developed using the Rust programming language. ICPEx integrates with a range of wallets on IC, including Internet Identity, Plug Wallet, Stoic Wallet, Bitfinity Wallet and Astrox ME, giving users the flexibility to choose their preferred wallet, ensuring a seamless and user-friendly experience.
The technical architecture of the project is as described in the figure above. The core is backend canister and router canister. The backend canister is used for token canister and business management. Router canister is used to manage the liquidity pool and maintain the normal operation of trading algorithms. Various transaction data will be retained in the transaction canister. At the same time, the oracle canister will feed the price to the router canister.
Internet Computer superpowers
-
First of all, from the perspective of user experience, the most significant feature is the 0 Gas mechanism of the IC. This eliminates the need for users to spend too much money on various on-chain operations, and almost completely retains the web2 usage habits of incremental users.
-
Secondly, IC’s full-chain development system enables the complete concept of decentralization to be realized. The full on-chain front-end and back-end eliminates some of users’ concerns about centralization. At the same time, the corresponding SNS DAO system has been adopted to realize the concept of co-governance on the chain.
Go-To-Market strategy
1.First of all, after a period of public testing and trial operation of the official version, we have accumulated some users. It can be seen that current users have created 230+ tokens and 90+ liquidity pools on ICPEx.
2.We pay great attention to building communication channels with community members. We have currently established some media accounts for communication and interaction with community members, including twitter, discord, telegram, etc. In the near future, we will focus on the construction of media groups within the IC ecosystem, including Openchat and Mora, etc.
3.We will release a series of plans to motivate members who participate in the construction of the ICPEx community. Co-construction methods include publicity, functional feedback, liquidity provision, etc.
4.We will establish strategic partnerships with ecological project parties to jointly carry out community publicity and liquidity optimization to meet user needs.
Monetization
1.In order to maintain the long-term development of the project, ICPEx will aim to make profits. This will allow us to better serve our community members.
2.Our plan is to monetize the project through fees for customized features and tokenization of the governance model.
3.SNS is a good way to transform a project into a DAO. We plan to conduct fair and transparent token distribution through SNS and build a decentralized governance mechanism. This will encourage community participants at different stages to engage in community co-governance and achieve the long-term success of the project.
Status of the project
1.At present, ICPEx has successfully passed the public beta stage and is in the trial operation period of the official version.
2.As of now, users have created 230+ tokens and 90+ liquidity pools on ICPEx. It is worth mentioning that most memecoins in the IC ecosystem are created by community members on ICPEx.
3.We have completed the construction of the following content, which makes ICPEx a DEX with unique algorithms and sound functions in the IC ecosystem.
(1)Implementation of basic function
<1>Standard Liquidity Pools
· Each pool corresponds to a canister, and users interact with the canister to complete relevant transactions.
· Liquidity providers can add trading pairs to the pool to provide liquidity for those pairs.
· The pool creator can set transaction fees, volatility coefficient, and the trading token pairs (Base Token and Quote Token) for the pool.
<2>Exchange
· When users input the amount of token A they wish to trade, the router canister determines the optimal trading route, identifies the pool that offers the most token B, and returns the expected amount of token B that the pool can provide.
· Users can set a slippage tolerance (default 0.5%) and submit the exchange transaction, which is handled by the router canister.
<3>Wallet
· The wallet functionality is entirely implemented within the IC environment.
· The wallet comprises a main wallet and sub-wallets.
· Users can search for specific tokens by inputting their symbol or canister ID.
<4>Dashboard
· The data for the dashboard is sourced from the transaction records canister.
· Analysis of these data is used to present information such as Top Tokens, Top Pools, and Transactions.
(2)Implementation of multiple liquidity pools
<1>Single-Token Pools
· Single-Token pool is a special case of standard liquidity pool. The key difference is that when creating a single-token pool, the pool creator should set the base token, quote token and the init price, but not provide initial liquidity for the quote token. The init price is used to limit the minimum price at the time of initial transaction.
· When users swap the base tokens, liquidity is created in the pool, turning the single-token pool into a standard pool. When the quote tokens in the pool are exhausted, the standard pool will revert to a single-token pool.
<2>Private Pools
· Private pools are owned by the pool creator and follow the standard PMM algorithm. Users can freely set values for Mid Price, Trading Fee Rate and Volatility Coefficient.
· Private pool creators can add or remove liquidity in any ratio they desire.
<3>Anchored Pools
· This functionality is similar to Curve. Anyone can add or remove liquidity in this pool according to the ratio of tokens in the pool.
· Anchored pools have relatively low price volatility.
(3)Function optimization and official version release
<1>Create Token
· This feature allows users to create tokens using the DIP20+ protocol. The DIP20+ protocol is an enhanced version of the DIP20 protocol.
· Each token corresponds to a canister, and users can create tokens by paying fees.
<2>Add Cycles
· Users can easily add cycles to a Liquidity Pool.
<3>Expert Mode for swap
· In expert mode, users can bypass the slippage limit.
<4>ICRC-2+ Protocol
· The ICRC-2+ protocol is an enhanced version of ICRC-2.
· Functions include transfer fee, burn fee and additional issuance settings, as well as one-click decentralization (relinquish token ownership).
Resources
Website: https://icpex.org
Linktree: ICPEx
Future Plans
1.We will still improve the functions of ICPEx. In the near future, we will build liquidity mining, staking and other functions to meet the diverse needs of users.
2.We have observed that there is a certain gap between the current liquidity of IC ecological projects and blockchain ecological projects such as ETH and Solana. The market has not yet realized the huge potential of IC ecological projects. We hope to use our own strength to do our part in promoting IC ecological projects. Therefore, we will integrate some mainstream traffic portals such as dexscreener so that the majority of web3 users can join the IC ecosystem.