LogoLogo
  • Overview
    • 👋Introduction
    • 🎯Vision
    • 📚Background
  • Hopper
    • 👋Intro
    • 💱Hopper DEX
    • 🚀Hopper Launchpad
    • 👛Hopper Wallet
    • 🌉Hopper Bridge
    • ⚡Instant Swap
    • 💬Hopper Social
    • 📝Inscription Module
  • Tokenomics
    • 💎Tokenomics
Powered by GitBook
On this page
Export as PDF
  1. Overview

📚Background

Previous🎯VisionNext👋Intro

Last updated 4 months ago

Decentralized exchanges (DEX) come in various design patterns, each with its own advantages and disadvantages regarding functionality, scalability, and decentralization. The two most common types are order book DEXs and automated market makers (AMMs). Additionally, DEX aggregators are a popular model that can search for the best trade prices or the lowest gas fees across different DEXs on various chains to meet users' trading needs.

The primary advantage of DEXs lies in their utilization of blockchain technology and immutable smart contracts, which provide a high degree of certainty. In contrast, centralized trading platforms (such as Coinbase or Binance) use internal matching engines to execute trades, while DEXs rely on smart contracts and blockchain technology for transaction execution. Users on DEXs have the ability to fully manage their account funds through their own wallets.

When trading, DEX users typically incur two types of fees:

  • Network Fees: These are the gas fees associated with on-chain transactions.

  • Trading Fees: These fees are paid according to the protocol's rules, distributed to the underlying protocol, liquidity providers, token holders, or all of the above.

The ultimate vision of DEXs is to create a permissionless, purely on-chain infrastructure that eliminates any centralized single points of failure, decentralizes ownership, and distributes it among the community of members. A common approach is to empower decentralized autonomous organizations (DAOs) with governance authority over the protocol. DAOs are formed by the relevant community, and members participate in key decision-making for the protocol through voting.

However, while striving for maximum decentralization, ensuring that the protocol stands out in a competitive market is no easy task. The core development teams of DEXs often possess stronger capabilities and judgment in assessing the protocol's critical functions. Nevertheless, many DEXs choose a distributed governance model to enhance resistance to manipulation and ensure long-term stability.

Moreover, users increasingly need a one-stop platform to access a comprehensive suite of DeFi services, including seamless trading, launching, bridging, staking, and yield farming, all within a single, user-friendly interface.