The decentralized finance (DeFi) space is a hotbed of innovation and new ideas. One of the most interesting areas of development in recent years has been the rise of decentralized exchanges (DEXes). These platforms allow users to trade cryptocurrencies in a decentralized, trustless manner, without the need for intermediaries like traditional exchanges.
In this episode, we will explore some of the latest developments in the world of DEXes, focusing on Sifchain, a cross-chain DEX that uses the Kosmos SDK and includes Layer 1 validation. We will dive into Sifchain's rebalancing model for validators and liquidity providers, how transaction fees are calculated, and the asymmetric addition of tokens into liquidity pools. Specifically, we will explore the differences between internal and external fees, and how they affect traders and liquidity providers. By the end of this article, you'll have a deeper understanding of how DEXes work and how Sifchain is pushing the boundaries of what's possible in this exciting and rapidly-evolving space.
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EP 34: Economics of Cross-chain DEX with Sifchain