Podcast Summary
In this episode, the hosts discuss the upcoming release of Uniswap X and its potential implications on Automated Market Makers (AMMs). The guest, Cyril from SWAP, provides insights into the new trading system and its potential impact on the market. The hosts also delve into the recent addition of Protocol FX to the Convex family, the challenges faced by smaller protocols, and the future of Layer 2 solutions.
Key Takeaways
Uniswap X and the Future of AMMs
- Uniswap X Introduction: Uniswap X is a quasi-RFQ system that allows both off-chain and on-chain market makers to bid for orders. It uses a Dutch auction system where fillers propose prices to compete for filling orders.
- Impact on AMMs: The introduction of Uniswap X could potentially put AMMs out of business as more off-chain market makers fill quotes, leading to a decline in volume and liquidity for AMMs. However, different assets may have different use cases for AMMs, and long-tail assets may still benefit from AMMs.
- Advantages of AMMs: AMMs offer continuous liquidity and allow users to trade fully decentralized by interacting with smart contracts. This is particularly beneficial for those who want to avoid centralized exchanges due to custody issues.
- Uniswap X vs Other Aggregators: Uniswap X competes with other aggregators like 1inch, ZeroX, and PowerSwap, which already offer RFQ pricing from private market makers.
- Swap’s AMM Design: Swap uses the architecture of Balancer V2 and integrates an off-chain quotation system that allows for more optimized quotes by incorporating external information and running more computations.
Convex’s Addition of Protocol FX
- Integration of FXN: The integration of FXN into the Convex ecosystem is seen as a sign of belief and confidence in both FX Protocol and the broader crypto market. The unidirectional conversion of FXN tokens into CVX FXN tokens, which are permanently locked with Convex, is also discussed.
- Convex’s Challenges and Successes: Despite facing challenges in the past, Convex’s recent moves have led to a significant increase in the token’s value.
Future of Layer 2 Solutions
- High-Performance Layer Two by Avigo: The hosts discuss the upcoming high-performance Layer Two being launched by Avigo and Ave Dao’s plans to convert parts of their treasury into go.
- Migration to ZK-Powered Layer 2: Kanto is another project joining the trend of migrating to become a ZK-powered Layer 2 on Ethereum, using the Polygon chain development kit.
- Long-Term Future of Layer 2 Solutions: The hosts speculate on the long-term future of Layer 2 solutions and the possibility of everything eventually rolling back to Ethereum.
Sentiment Analysis
- Bullish: The hosts express a bullish sentiment towards the future of Layer 2 solutions, particularly with the upcoming high-performance Layer Two by Avigo and the migration of projects like Kanto to become a ZK-powered Layer 2 on Ethereum.
- Bearish: There is a bearish sentiment towards AMMs with the introduction of Uniswap X, as it could potentially lead to a decline in volume and liquidity for AMMs.
- Neutral: The hosts maintain a neutral sentiment towards the integration of FXN into the Convex ecosystem, acknowledging the challenges faced by Convex in the past but also noting the recent increase in the token’s value.
