Development Direction of the New Generation DEX: Integration of Chain Abstraction Technology

Recently, the cryptocurrency market has gained attention due to the wealth effect from a certain airdrop event, sparking discussions about the future of star DEXs. So, what form will the next generation of DEX take?

Industry experts believe that the new generation of DEX will achieve significant breakthroughs in user experience and liquidity. One noteworthy development direction is the integration of DEX with chain abstraction technology, which is expected to deliver a user experience comparable to centralized exchanges (CEX).

Advantages of Chain Abstraction Technology for DEX

The integration of chain abstraction technology and DEX will bring numerous benefits to users:

1. Lower the operational threshold: Users can easily use DEX without needing to deeply understand the underlying blockchain technology, simplifying the complexity of multi-chain account management and cross-chain transfers.

2. Enhance liquidity: By integrating funding pools from multiple blockchains, DEX can offer a richer variety of trading pairs and higher liquidity, which is especially beneficial for small traders, effectively reducing slippage issues.

3. Optimize cross-chain experience: Significantly reduce the complexity and cost of cross-chain transactions, making it highly attractive for users who need to frequently transfer assets between multiple blockchains.

Specific Integration Methods of DEX and Chain Abstraction Technology

1. Build unified liquidity: Utilize advanced cross-chain bridging technology to achieve the free flow of assets between different blockchains, enabling DEX to integrate multi-chain liquidity and distribute trading orders for execution across various chains.

2. Smart Contract Management: Automate the management of multi-chain asset exchanges and liquidity pools through smart contracts, optimizing price discovery and liquidity supply of AMM across chains.

3. Unified User Interface: Provides a one-stop trading platform where users can complete transactions without switching wallets or understanding the details of specific chains. The backend automatically handles all cross-chain operations, and users only need to express their trading intentions; the system will automatically find the optimal cross-chain path.

This combination not only enhances the user experience but also significantly improves the overall efficiency of the decentralized finance (DeFi) ecosystem, making DEX more convenient while maintaining the essence of decentralization, closer to traditional centralized exchanges.

User Use Cases

Suppose a user wants to place a bet on a prediction platform, they need to purchase USDC on a specific network. Using a chain-abstracted DEX, the user only needs to select "Exchange ETH for USDC", confirm the transaction, and pay a single fee. The system will automatically complete the entire process from withdrawing ETH, cross-chain transfer, intermediate exchange to finally obtaining USDC, without the user needing to worry about complex backend operations.

Summary and Outlook

The combination of DEX and chain abstraction technology is highly anticipated mainly because they both involve cross-chain operations and asset management, requiring a simplification of the user experience to enhance convenience and liquidity. Chain abstraction technology encapsulates cross-chain details, significantly reducing the learning and operational costs for users, while also improving the overall efficiency and interoperability of the system.

Industry insiders are eagerly anticipating the emergence of a new type of DEX product that integrates chain abstraction solutions. With the continuous development and innovation of technology, future DEXs are expected to provide users with a more convenient and efficient decentralized trading experience.