edgeX unlocks on-chain finance: from decentralized derivatives protocols to financial settlement chains

Here is the English translation of the text, with the specified terms retained and not translated: The crypto field is undergoing a profound paradigm shift from centralized exchanges (CEX) to decentralized exchanges (DEX). CEXs once dominated the market with their centralized processing capabilities, user-friendly interfaces, and high liquidity, but this came with centralized risks, lack of user asset control, and transparency issues. These issues have been amplified in recent years, especially after the FTX collapse, with users' concerns about asset security reaching a peak. Meanwhile, DEXs, with their decentralized and publicly transparent features, including user self-custody of assets, public transaction records, and automated fund management through smart contracts, have reduced the need for user trust in centralized platforms. The rise of DEXs is not only the result of changing user demands, but also the progress and innovation in blockchain technology. The combination of high-performance L1/L2+Perp DEXs has validated the idea of on-chain high-frequency trading. Hyperliquid is a typical case, reflecting the market's imagination for on-chain high-frequency trading and attracting a large number of users to discover potential alpha. edgeX is gradually emerging in this context. Improved infrastructure drives the performance improvement of on-chain exchanges A few years ago, the basic infrastructure for on-chain trading was relatively backward, and its performance was difficult to match that of traditional CEXs. However, with the rapid development of technology, especially the application of ZK-Rollup technology and the explosion of Ethereum Layer2, the performance and security of on-chain trading platforms have been greatly improved, and the trading speed and user experience have also made a qualitative leap. As the first MVP of the edgeX ecosystem, edgeX v1 uses the StarkEx Layer 2 engine to drive its settlement and Rollup system, with even higher security. Each transaction on edgeX is verified by ZK-Proof. Through the ZK-Rollup of StarkEx, user transactions are not only processed at the Layer 2 level, but also finally verified and confirmed through the L1 smart contract, ensuring the transparency and security of the transactions. edgeX V2: High-performance Financial Settlement Blockchain edgeX v2 is a high-performance Ethereum L2 that has comprehensively upgraded the trading infrastructure, liquidity layer, and user experience through optimized technical architecture. (1) Settlement Layer All transactions are settled on Ethereum, and the batch processing of transactions reduces on-chain fees while maintaining data integrity. Users control their assets through their own private keys, avoiding the risks of centralized platforms. Due to the self-custody mechanism, users can use their wallet addresses directly. (2) Order Book Trading Engine Layer The trading engine of edgeX v2 has been further upgraded, with the ability to process 200,000 orders per second and a matching latency of less than 10 milliseconds, providing a solid foundation for high-frequency trading and large-scale concurrent user transactions. (3) Hybrid Liquidity Layer The hybrid liquidity layer is a crucial component of the edgeX v2 ecosystem. Through cross-chain information transmission, edgeX can realize asset flow and trading operations between different chains, breaking the isolation between chains and enhancing overall liquidity. edgeX supports native asset bridging and deep integration with other mainstream blockchains, ensuring that users can freely deposit and withdraw assets across multiple blockchains without worrying about liquidity shortage or asset lock-up. In the future, edgeX plans to launch multi-chain spot trading and integrate with edgeX fun to provide Meme bot functionality to help users quickly capture market dynamics. (4) User-friendly Interface For most retail investors who are only familiar with CEXs, the usage threshold of DeFi is often high, especially when involving multiple chains and protocols, which can deter many novice users. The UI design of edgeX (currently applied in edgeX V1) is based on user considerations, and the mobile experience is almost identical to that of mainstream exchange apps. With the launch of edgeX v2, edgeX is evolving from a decentralized derivatives protocol to a financial settlement chain specifically designed for DeFi products. This infrastructure will support the permissionless issuance of diversified markets and DeFi products through a decentralized governance mechanism based on Proof of Demand and edgeX's plug-and-play trading modules. Effective Liquidity In the development history of some previous on-chain derivatives trading platforms, the lack of market-making experience of the teams has made solving liquidity a key challenge. Introducing external market makers is a strategy adopted by many platforms, and many well-known Perp DEXs have collaborated with external market makers to enhance liquidity. However, this means the platform needs to provide a large amount of Tokens as incentives for market makers, which in the early stage of the platform will attract good liquidity, but as the accumulation of Tokens, it will gradually evolve into a game of APY, i.e., mining, staking, and selling. Hyperliquid has demonstrated the importance of market-making experience and resources on a derivatives platform, avoiding the large-scale outflow of tokens to external teams and better realizing effective incentives for users. Similarly, edgeX also has exclusive market makers to guide liquidity in the early stage. Furthermore, the edgeX team will launch a liquidity layer similar to Hyperliquid's HLP at the end of January, allowing users to obtain stable yields by participating in liquidity provision, which also demonstrates edgeX's reliable profitability and ability to provide relatively high real yield APY. From "Infrastructure + Narrative" to Satisfying Real Needs For a long time, the valuation of crypto projects has often focused on infrastructure building and narrative marketing, inflating huge valuation bubbles in the primary market even without a product. However, as the market matures and the bull-bear cycle shifts, investors and users are becoming more rational. Nowadays, the true value of a project is increasingly determined by its ability to meet user needs, rather than just telling a "big pie" style marketing narrative about the future. edgeX has already achieved a certain real user growth through its minimum viable product - a high-performance Perp DEX, and has launched one of the few on-chain products based on the Mobile platform. The edgeX Mobile app simplifies the interface and optimizes the operation process, allowing even users without any on-chain trading experience to get started easily. The mobile design not only allows users to participate in transactions anytime and anywhere, but also provides a smooth experience similar to CEXs, greatly reducing the user's threshold for participating in on-chain trading. From the development path of CEXs, derivatives trading is mainly used to open up the market, but the real formation of brand reputation and moat is in the spot market, especially the exclusive listing of new assets. edgeX will launch its spot trading module in early February, with spot assets aggregated across the chain, including mainstream coins and on-chain new assets like Memecoins. As a layout for spot trading, the trading bot edgeX.fun has become the first application in the edgeX ecosystem. edgeX.fun is dedicated to Memecoin trading, and its trading points have been officially integrated with the edgeX point program. edgeX.fun focuses on the frontline of on-chain new assets, and if it can be connected with edgeX's main spot trading station to form a wealth effect, it is expected to bring more users and brand exposure to edgeX. Whether it is derivatives trading or spot trading, edgeX is not only committed to providing a smooth trading experience matching CEXs, but also constantly iterating to adapt to the rapid development of the on-chain market and meet the diverse needs of different user groups. Overall, as the crypto market gradually shifts from the early narrative-driven stage to a more practical product value proposition, user demands have become more clear and pragmatic; coupled with the gradual emergence of the drawbacks of centralized exchanges, the transparency of on-chain trading is increasingly attracting more users and players. Although CEXs still dominate the mainstream, the contradictions in platform rules, market manipulation, and information asymmetry are also becoming more apparent. edgeX, through its decentralized architecture and continuously iterating functional experience, meets users' demand for trading opportunities and trading fairness. The permissionless trading environment, public data transparency, and market-driven price discovery mechanism allow every user to find and utilize various trading opportunities on a fair platform. Compared to narrative and marketing, edgeX is more focused on long-term user value, and its actual revenue growth is driven by focusing on real trading functions, liquidity guidance, and the creation of real user products.

As more features are launched and the ecosystem is improved, edgeX is expected to become another highlight after Hyperliquid. edgeX recently launched a points program to reward real users. Since there are no external market makers to share the points rewards representing potential airdrops, more points will be allocated to real users.