A ZK Rollup Orderbook Decentralized Exchange
A fairly launched, Dao-centric, Zero Knowledge based self-custody trading protocol built on Ethereum. DeGate is Limit Orders, Decentralized and Self-Custody.
DeGate is an Orderbook Decentralized Exchange (DEX) protocol built on Zero Knowledge (ZK) technology. As a ZK Rollup, DeGate fills a key gap in the market by providing spot order book trading in self-custody manner, and grid trading within the Ethereum ecosystem, offering an experience similar to centralized exchanges (CEX). DeGate is a DAO-centric, self-custody exchange, with a DAO fully controlling its treasury. DeGate is a protocol of the community, by the community, and for the community.
The protocol enables several functions, including Spot Trading and Grid Trading, with more features to be added to enable a coherent, self-custody trading experience on a self-custody exchange.
Spot Trading
Gas fees are a major concern on the Ethereum mainnet. Conventional AMM DEXes incur high gas fees on Ethereum and provide only market orders, where traders have to accept the current market price for a trading pair. DeGate is a new type of self-custody exchange protocol based on a ZK rollup that allows for spot trading through limit orders(CLOB), similar in experience to a centralized exchange. The ZK technology powers a “match node” matching orders between traders, periodically recording the transactions on a mainnet. This ensures a faster, cheaper, self-custody trading experience that is still secured by Ethereum. Crucially, the protocol is designed such that fees are low for taker orders, and free for maker orders.
Essentially, DeGate is limit orders, decentralized and self-custody.
To further reduce gas fees for users, the protocol has pioneered gas-saving features including:
Gas Saving Deposit: Depositing into a DEX protocol often incurs a high one-time fee. DeGate has created a gas-saving deposit option. This option is based on a “simple transfer” rather than a “contract call”. This method can reduce the one-time gas deposit fee by up to 75%.
Ultra-Efficient Gas Saving (UEGS) technology: This innovation was built specifically for DeGate protocol this ensures significant gas savings while maintaining a decentralized protocol.
While DeGate derives its security from Ethereum and is designed to be trustless and permissionless, it provides functionality similar in form and function to centralized exchanges without the inherent security risks of such exchanges.
Grid Trading
The grid trading function is another innovation of the DeGate protocol. This feature replicates the grid trading on a CEX, enabling users to implement a trading strategy based on the ups and downs in a trading pair while maintaining full self-custody of their assets.
Combined with the advantages of DeGate's free maker orders, this feature can help users earn long-term and stable returns safely in the highly volatile cryptocurrency market without the assets being custodized by a centralized entity. Data availability for all grid strategies on DeGate is secured by Ethereum through zero-knowledge technology, ensuring a transparent and secure self-custody trading experience.
Design Principles
The design of DeGate protocol is based on three principles:
Fully decentralized
In the long term, the goal of DeGate protocol is to implement a standalone open-source client functionality. This means that no one is running the service in a centralized fashion and the system is unstoppable. By downloading the open-source code on GitHub or a similar website, anyone can use the protocol. At long-term equilibrium, the protocol is designed to be based on an open network composed of thousands of nodes.
Trustless
DeGate was designed such that the user always has the highest authority, and no malicious or centralized authority has access to the user's assets. In this sense, malicious actors "can't do evil" because of DeGate's non-custodial. Additionally, smart contracts can be upgraded only after a substantial timelock of 45 days. See details here.
Permissionless
The whole system is an open protocol. Any token can be listed on DeGate by anyone. And anyone who has a blockchain wallet can directly use DeGate.
Roadmap
DeGate is working towards a fully decentralized, self-custody, limit order trading protocol built on a DAO-centric model. All liquidity comes from the community, and all income belongs to the DAO. It is a grand and challenging project that will be implemented in multiple milestones, but even in the first version, the protocol still guarantees a trustless system where all assets are owned by the user.
Phase 1 - Project Launch
Expected time to launch: 2021
The whitepaper for DeGate 1.0 will be released (Update here). In line with our commitment to a fair launch, two major community events will enable participation in DeGate's development DeGate. 1) Liquidity Bootstrapping Pool on Balancer
This event allows the community to actively participate in DeGate's growth. The Balancer LBP was chosen for its effectiveness in preventing frontrunning, unnecessary speculation, and other undesirable activities. It ensures initial token distribution and liquidity within a stable price range at launch.
2) Social Network-based Token Offer
This is an early opportunity for active social media users to buy DG tokens at a preferential rate in a unique initial Social Network Offering.
Phase 2 - Testnet, Security Testing
Expected time to launch: 2022
DeGate trading deployed on Ethereum testnet. All major features will be launched at this stage and delivered to all users for use on the testnet. This will demonstrate the product features to the community and allow for rapid feedback and iteration.
Features that will be included in this phase include:
Spot trading module based on zk-rollup
High-performance spot matching engine
Front end UI for easy access to DEX protocol
Ultra-Efficient Gas Saving aggregation technology
Grid trading features
Permissionless listing
Exodus withdraw mode
In this phase, concrete actions to be completed include:
Completion of security audits involving multiple third-party institutions for circuits and smart contracts
Fixing technical issues that need to be resolved before the official mainnet launch
Performance and throughput testing, tuning
Improvement and optimization of the gas fee billing system
Phase 3 - Mainnet Beta, Product
Expected launch: 2023
DeGate spot component deployed on Ethereum mainnet with a whitelist. Real Ethereum ERC20 assets will be supported for trading in this version. Early community contributors, partners, market makers, and developers will be given priority on the whitelist to test and use DeGate.
Features in this phase include :
Full trading API support with documentation
Asset Key support to enable more authorization for professional users
In this phase, concrete actions to be implemented include:
Preparation to open source the code base
Preparation for partial governance by DAO of token economy and parameter settings
Construction of developer community and market maker ecosystem
Phase 4 - Mainnet Launch, Marketing Camapigns Launch (DeGate 1.0)
Expected launch: 2024
In this phase, the restrictions on whitelist registration will be removed, opening the protocol to everyone. To attract an initial user base, liquidity mining incentives will be offered. Token distributions from our unique social media round and other allocations will also begin.
The primary focus will be on continual product enhancements to achieve a strong Product Market Fit (PMF) for DeGate. Marketing campaigns, small-scale PR efforts, and Key Opinion Leader (KOL) partnerships will be implemented to gather valuable feedback from the community.
DeGate will further develop the DAO-centric governance model, enhancing voting power and incentives to token holders. At this stage, it is important to note that the protocol will be served by a single match node, with full decentralization addressed in Phase 5.
Q4 2024: Cross Chain Intent Trading
Trade on all leading Chains: Whether using an existing Ethereum wallet or creating a new one with an email login, users can trade tokens across chains without setting up new wallets or gas tokens, or switching chains at all when buying tokens on a new chain.
Imagine a user with only a MetaMask wallet on Ethereum and no other on-chain wallets. With DeGate, they can now use their USDC to buy a token on Solana.
This is done through the concept of Solvers. The solver performs the function of buying the token on Solana. Then, the token is securely delivered to a Solana address linked to the user's wallet and fully controlled by their private key. This token, along with other assets, can then be managed directly in their DeGate account.
Fast and Cost-Effective: The estimated time is less than a minute for any transaction.
High Certainty: Our system ensures a reliable and smooth experience for every swap.
Launching first with Solana, the Cross-Chain Intent Trading feature will expand to other leading chains, with more chains to be added as soon as they are ready. The end goal is for all leading chains to be available on DeGate, as part of DeGate’s mission to deliver a comprehensive and decentralized financial platform.
Phase 5 - Hyper Scalability (DeGate 2.0)
Expected launch: 2025 and beyond
EIP-4844 introduces a new kind of transaction type to Ethereum. EIP 4844 will enable "blobs" of data to persist in the beacon node for a short period of time. To be compatible with Ethereum's scaling roadmap and EIP-4844, DeGate will launch a new version to take advantage of the blobs data scheme that EIP-4844 brings about. This will significantly boost DeGate's throughput as well as decrease gas fees for DeGate users. At that time, user experience of DeGate will be greatly improved without compromising security.
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