Table of Contents
- Building a new frontier for improved market liquidity
- Adoption via incentivization and compliance
- Looking ahead
Decentralized finance (DeFi) is no longer a market reserved for only the crypto savvy, as highlighted by the fact that the sector has transformed into a multi-billion dollar industry within just a few years’ time. DeFi’s meteoric rise can, in large part, be attributed to the fact that it has made a wide range of quality financial services accessible to people across the globe, irrespective of their economic status, location, etc.
That said, as the market has blossomed, the need for efficient, user-friendly, and secure decentralized exchanges (DEXs) has become paramount. In this regard, AllianceBlock, an infrastructure provider for decentralized tokenized markets, has recently launched ‘Nexera Exchange’.
Hosted on Arbitrum One, the official mainnet of the Arbitrum ecosystem, Nexera brings together the best of the centralized and decentralized financial realms, providing digital asset enthusiasts with a holistic solution that can mitigate many of the longstanding issues — such as liquidity, user experience, and security — plaguing the DeFi ecosystem.
Building a new frontier for improved market liquidity
Since the early days of DeFi, the market has been riddled with liquidity issues. This is because traditional DEXs possess shallow capital reserves that are often unable to meet the demand put forth by traders executing large orders. And, even when they are able to accrue the funds, they end up significantly impacting the market price of the asset in question.
Nexera Exchange resolves this bottleneck by integrating Uniswap V3 — a popular DEX offering concentrated liquidity features — into its digital architecture, thereby allowing itself to tap into the latter’s funds, offering traders a higher degree of flexibility as well as better pricing options.
Moreover, the platform deploys an on-chain limit order book, which enhances liquidity and order execution. To elaborate, unlike regular DEXs, which are heavily dependent on off-chain order books (which are peer-to-peer (P2P) transaction-based), Nexera's on-chain approach ensures greater transparency and allows for more complex trading strategies.
Speaking with Rachid Ajaja, CEO of AllianceBlock, the aforementioned feature was incorporated into Nexera’s design so as to allow it to operate efficiently even in high-throughput environments. Using a technology called ‘Data Stream,’ Ajaja noted that real-time price updates and comprehensive trade statistics — which are typically only available on CEXs — can be obtained with the touch of a button, adding:
"Nexera Exchange aims to offer traders the transparency and autonomy of DEXs combined with the efficiency typically found in CEXs. Our collaboration with Nuant, a leader in quantitative analytics and DeFi research, equips our platform with cutting-edge Data Stream technology. This enables Nexera to process blocks in less than 100ms, ensuring that traders always have real-time market data at their fingertips."
Another challenge that Nexera tackles is that of a poor DeFi user experience, which plagues almost all traditional DEXs in comparison to their centralized counterparts. This is because they offer non-intuitive interfaces that are full of complex technical jargon, making them less appealing to the average trader. Nexera comes with a user-friendly interface that combines the ease of use found in centralized platforms with the security and control offered by decentralized systems.
Adoption via incentivization and compliance
To encourage user participation, Nexera has introduced a stability staking pool as well as a reward mechanism wherein users can stake NXRA — the platform’s native crypto token — to earn a portion of its trading fees. Commenting on this strategy and how it stands to help spur Nexera’s long-term success, Ajaja noted:
"Incorporating NXRA as an incentivization tool is part of Nexera Exchange's commitment to creating a mutually beneficial environment for its users and the platform's growth. By allowing NXRA token holders to stake and derive rewards from a stability staking pool, we're offering them not just a yield but also a direct benefit from the platform's trading volume. This creates a positive cycle of growth and reward, reinforcing the platform's value proposition."
Lastly, to ensure a high level of operational security and compliance, Nexera uses a dual framework such that when it comes to individual users, the platform deploys a decentralized KYC/AML procedure that allows for self-sovereign identity verification, allowing individuals to access certain features without compromising their personal data. However, for institutional traders, the platform uses a more rigorous verification process, ensuring compliance with higher regulatory standards.
As part of its proposed roadmap, Nexera is looking to introduce advanced DeFi primitives and unique yield-generating strategies alongside additional security features (such as multi-factor authentication and advanced cold storage options) in the near future. Not only that, the platform also plans to introduce fractionalized NFT representation technology to support the tokenization of real-world assets, further broadening its appeal and utility. Therefore, moving forward, it will be interesting to see how the future of the DeFi sector pans out, especially as more and more future-ready solutions like Nexera make their way into the market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.