ProficieNt last edited by
Vexchange has been around since the launch of mainnet, in one form or another. We started as a simple VTHO<>VET swap service under vtho.exchange. Since then, Vexchange has grown into a fully fledged decentralized exchange that supports trading for almost all VIP-180s (if one is missing, you can ping us or add it yourself via the interface).
Now that we have had our contracts up and running for a bit, we are looking to grow the DEX and the ecosystem around it. A first step towards growing this ecosystem has been the integration of Vexchange into the official VeChain mobile wallet. With time we hope this integration will let more users access the swap services of Vexchange and potentially even become liquidity providers on the exchange.
How Vexchange Works
For those that are unfamiliar with Vexchange, or simply want to know a bit more about how the exchange works, I will attempt to summarize an article I wrote here. Basically, instead of using an order book, we use a formula to determine the price of the different assets on the exchange. The way this formula works is that it looks at how much of a particular asset the exchange owns and then uses that to determine how rare (expensive) or common (inexpensive) that asset is. What this means is that as users buy up a particular asset, the price for that asset will increase, conversely, as users sell a particular asset to the exchange the price of that asset will decrease.
In order for the exchange to be able to determine the price of an asset, it requires users to stake an equal amount (dollar value) of VET and an asset. This is because the exchange prices all its assets in VET, so it needs to hold reserves of VIP-180s and VET. Users who stake VET & VIP-180s are entitled to a portion of the exchanges fees as an incentive for staking their assets on the exchange.
Features and Benefits of Vexchange
Because of Vexchange's unique approach to trading assets, we get a few benefits and drawbacks:
- Instant trading between any asset (SHA -> DBET is one transaction)
- Liquidity for third-party smart-contracts & dApps
- No listing process (no fees and no censorship)
- No native limit orders, only market orders
For these reasons, there are a few use-cases that Vexchange excels at. The main use-case is integrating swaps seamlessly into other dApps and smart-contracts. These third-party projects can let their users swap between any asset seamlessly within their interface. This means you could enter Plair & DBET tournaments using VTHO, SHA or any other token supported by Vexchange. You would do this by seamlessly swapping your VTHO or SHA and depositing the correct token.
Currently, there are no limit orders. This means you must check the price you are being offered by the exchange before you execute your order. If your order is too large for the exchange you might need to execute it in multiple stages. Arbitrage on the DEX usually takes a few blocks, meaning you should be able to relatively easily trade larger volumes by breaking your order up into smaller pieces. In the future, we will look to develop limit orders that will let users trustlessly purchase larger amounts of assets through Vexchange and other DEXs.
Use-Cases for Vexchange
Some of the best use-cases for Vexchange are in payments. More specifically, Vexchange can let your users pay for your services in any VIP-180 they want, while ensuring you receive your desired token. Two previously mentioned examples would be the cases of participating in DBET or PLA tournaments using alternative currencies. Beyond these projects, you could see Vexchange letting users purchase NFTs on Totient or Veriarti's marketplaces, using any token they want.