Ethereum based 0x (ZRX), a leading protocol for developing decentralized exchange services, has introduced a platform that aggregates liquidity from several different non-custodial digital asset trading platforms.
When traders place orders using the new service, called Matcha, the software program splits the user’s trade across multiple networks, which include Curve, 0x Mesh, Oasis, and Uniswap.
Part of the order may also be processed using various other “proprietary liquidity sources” in order to provide the best price for the trade.
Trading volumes on non-custodial crypto-asset exchanges have increased considerably this year. In fact, Anthony Sassano from EthHub confirmed recently that the total trading volume on DEXs (decentralized exchanges) has already exceeded total volumes from all of last year.
Normally, liquidity available for trading on DEXs is spread out over multiple different platforms, and this may cause “slippage,” which occurs when a trader might be expecting to pay a different price for a trade while the trading engine settles the transaction at another rate. DEX aggregators aim to help address this issue.
0x’s Matcha will be competing with other DEX aggregators including Paraswap and 1inch. However, 0x’s marketing lead Matt Taylor told The Block that Matcha’s order routing system “really hones in on the algorithms for how these orders are split between the various exchange networks.”
The new aggregator service aims to improve the user experience, which has been quite poor for DEXs. Ethereum gas prices have been going up and waiting times also make it inconvenient when conducting trades. That’s why 0x believes this could be a good opportunity to “uplevel the design of a DEX,” Taylor said.
DEX aggregators may all have similar types of UI/UX, which have so far been hard to use because they’re “non-intuitive and intimidating,” according to Brent Oshiro, the community engagement lead at 0x.
Taylor notably compared the new product to Robinhood, the popular crypto and stock trading app.
He noted:
“[Robinhood] did such a good job of designing a user-friendly application that it has brought in a new wave of users into stock trading, and we feel like Matcha can do that for DEX trading.”
0x said it won’t be collecting any fees for using the new aggregator. However, Taylor said that there might be some kind of fee users might have to pay in the future.