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IDEX's Winning Formula
IDEX vs. The Competition: A Closer Look
Perpetual futures are the dominant form of crypto trading, yet perp DEXs have less than 2% of overall market share. Existing perp DEXs are simply unable to provide the right combination of user experience and security to pull people away from CEXs.
IDEX fixes this. Fusing a high-performance matching engine with a custom zkEVM Layer 2 (XCHAIN), IDEX eliminates the gap between clunky perpetual futures DEXs and their more performant, but less secure, centralized counterparts (for more details check out our blog). The result is the best of both worlds, the performance and usability that consumers expect from a CEX as well as the transparency and safety of a DEX.
We naturally get a lot of questions as to how IDEX compares to the competition, and why someone should use IDEX over one of the others. We bucket competitors into three different styles.
1. “Defi First” Perp DEXs (e.g. GMX)
These types of products are characterized by their lack of order books and fully on-chain operating model. The tradeoffs required to make this model work generally come at the expense of traders. Issues include:
High fees for opening/closing positions, eliminating the possibility for certain types of trading styles
Passive LPs have different needs, with handicaps such as OI limits required to protect them from manipulation
Higher response times and no guarantees on order execution
Presence of MEV which can reduce trader profitability
2. “Decentralized” Order Book DEXs (e.g. DYDX v4)
These products have order books that are operated across many validators. Fundamentally this design prioritizes further decentralization at the cost of trading quality.
Validators each have a slightly different view of the world, breaking the price-time-priority matching process that underpins all order book exchanges
Decentralized order matching introduces MEV, the ability for validators to profit by reordering transactions
The rotation of validators in different geographies leads to variable latency and an overall increase in execution time
3. Hybrid Order Book DEXs (e.g. Vertex)
Congrats to these products as they have the right design! Just like in the centralized exchange space we believe there will be multiple winners. But we don’t want to share the crown, so how do we become the king?
Through better execution. Having the right framework is the easy part, executing on it is where the difference is made.
Future-proof settlement network: we’ve taken the time up-front to invest in XCHAIN, a long-term solution to transaction costs that settles to ETH L1 to maintain maximum security. Others will have to play catch up to develop their own app-chains in the near future and eventually migrate, a painful process for users.
Battle-tested matching engine: while the introduction of perps is new, it’s built on top of an exchange framework that has been running in production since 2020. We’ve seen it all, and when shit hits the fan we know it will still be standing.
Security above all else: Our team has six years of operating experience, across three different versions, with no hacks or lost funds. Keeping user’s funds safe is the foundation on which the rest of the features are built.
IDEX is built for traders and delivers the ultimate trading experience without requiring users to relinquish control of their funds. For a more detailed review, head over to our youtube channel to check out the recent demo. Don’t forget to jump into our Discord and keep an eye out for the upcoming Testnet Launch!
Catch you in the order books soon
Established in 2017, IDEX has set the standard as the premier high-performance decentralized exchange. The platform combines the speed and efficiency of traditional trading systems with the transparency and security of blockchain technology to create an unparalleled trading experience. IDEX is built for all traders, providing instant execution, millisecond latency, and gas-free settlement, while allowing users to maintain full control and custody of funds.