TomoChain, the Singapore-based public blockchain network, has announced that the platform’s proprietary decentralized exchange (DEX) protocol, TomoX, is scheduled for a mainnet rollout in May. TomoX is among a suite of products that the team from TomoChain has unveiled in recent months, including the privacy-oriented TomoP protocol and TomoZ gasless transactions.
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The TomoX mainnet launch follows the successful public testnet of the protocol which has been running since the beginning of last November. TomoX is a platform for developers, companies, and other entities to build and launch their own DEX on the TomoChain network. The platform is architected as a layer one protocol and is built directly into TomoChain’s masternode infrastructure — a departure from the tactics of other DEXs that are built on the second layer.
Complete with its own SDK, the idea is to drastically lower the barriers to launching a DEX, including minimal upkeep costs and no development background. Since the DEX operates at the core layer, the security and speed of TomoChain’s core are conferred to TomoX DEXs.
“The goal of TomoX is to empower a diverse system of DEXs, market maker (MM) providers, and independent projects to work together in a decentralized manner,” says Long Vuong, Founder and CEO of TomoChain. “Using a relayer-masternode design integrated directly into TomoChain’s EVM, TomoX essentially operates as one giant shared liquidity network for participants.”
Modular tools are rapidly emerging
The onset of TomoChain’s TomoX protocol is indicative of a broader trend that is gaining traction in crypto circles — modular infrastructure. Notably, Binance, who TomoChain already built a cross-chain bridge to its Binance Chain with, recently unveiled a white-label exchange product for local cryptocurrencies to rapidly iterate fully-functional crypto exchanges.
Binance’s vision mostly intends to relieve exchange operators of the technical back-end hassles of running exchanges. TomoX works in a similar light, but instead, focuses on bringing the elusive liquid order books to DEXs. Built into TomoChain’s first layer, users of TomoX will experience trading at a level similar to centralized exchanges, removing some of the biggest hurdles to user adoption of DEXs at the moment.
Throw in a simple user-interface, and TomoX may be highly appealing to exchange operators looking to focus on marketing and building relationships with market makers rather than persistently grinding through security and order engine procedures on the back-end. The TomoChain team anticipates a trading experience for users that would be roughly 50X faster than typical layer two DEXs.
Supplementing the desired liquidity is also available via TomoChain’s TomoBridge, which enables wrapped tokens for trading pairs like BTC, ETH, USDT, and some of the other most liquid trading pairs in the broader crypto market.
Most DEXs in the Ethereum ecosystem have minimal volume, wide order spreads, limited arbitrage opportunities, and poor user-experiences (UX). While the surges in DeFi protocols like Uniswap and Compound makes the limited adoption of DEXs unlikely to continue for long, TomoChain believes TomoX provides the type of umbrella ecosystem for liquidity that will attract financial entities — particularly in Asia where it’s located.
“We believe that there should be an incentive mechanism distributing trading fees to masternodes and operators,” says Vuong. “For example, a 50/50 sharing ratio between a masternode and the operator would be a reasonable option. However, this ratio is not hard-coded and can be negotiated between masternodes and relayers.”
TomoChain, which is replete with an impressive DeFi ecosystemof its own, bridges the TomoX DEX protocol with both TomoP and TomoZ.
The triad of protocols would allow trading fees to be paid by the tokens themselves and for users to perform private trades if they choose.
The user can then tap into TomoP’s privacy protocol, which masks transaction details using cryptographic primitives like RingCTs, bulletproofs, and stealth addresses. With a single click, private asset swaps, even executed by smart contracts, can be activated and transferred across the network.
TomoDEX will be the primary DEX launched on TomoX, run by the TomoChain team. Following the transition out of the public testnet and into the mainnet, TomoChain is also expected to release its borrowing and lending functionality by the end of Q2.
“Constant is the pioneer P2P lending application on TomoChain,” detailed Dr. Pham — TomoChain’s Lead Blockchain Researcher in a recent blog post. “In Constant, there are no intermediaries between lenders and borrowers. All interact through a set of smart contracts.”
TomoChain’s new borrowing/lending addition to TomoX will complement Constant’s offering, and add further liquidity to the blossoming network. Notably, TomoChain is not explicitly working with Constant, a centralized finance (CeFi) business, and TomoChain’s borrowing/lending feature is pure DeFi — integrated into TomoX.
The next few years are gearing up to play a pivotal role in the broader crypto and blockchain market. Market microstructure is maturing, assets locked in DeFi products are swelling, and more complex financial instruments (e.g.,) derivatives are seemingly everywhere now.