Nexus is the solution to EOS’ biggest problem: liquidity. Today we take a big step to improve liquidity by launching Nexus Exchange - an EOS DEX aggregator.
What is the issue with liquidity on EOS?
While the EOS token itself is very liquid, alt tokens on the EOS blockchain are not. EOS is available on centralized exchanges whereas these exchanges are still reluctant to list tokens from projects building on EOS. Therefore, liquidity is on chain in decentralized exchanges (DEXes), with volume concentrated in automated market makers (AMMs) like:
While AMMs are attractive in theory with low fees (typically ~ 0.3%), in practice, they suffer from slippage because a token's liquidity is scattered among many different DEXes.
Slippage is the price impact due to larger trade order sizes.
Low-liquidity constant-product AMMs and order-book based DEXes can lead to serious slippage, sometimes as high as 80%..
How can Nexus Exchange help?
Nexus Exchange simultaneously analyzes all DEXes that support a specific trade pair in order to always offer the best price. The main idea is to split large trade orders into smaller ones to reduce slippage and submit several smaller trades to different DEXes in parallel. Nexus’ Guarantee: our price discovery algorithm always matches the best price of any other DEX individually, oftentimes, splitting the trade results in even better prices than any individual exchange can offer.
How does Nexus Exchange work?
Nexus Exchange is very simple and works just like any other swap-based AMM:
Select the token and amount to sell (From), and the token to receive (To).
Optionally, set the Additional Slippage Tolerance (Minimum Received) in the settings. The transaction will fail if after submitting your trade there is an unexpected, unfavourable price movement which would lead to receiving less tokens than specified in Minimum Received.
Receive information on how many tokens are expected to be received, the price, and a comparison to other DEXes.
In this example, Nexus Exchange results in a price that is 1.341% times better compared to the best individual DEX (in this case DefiBox) for the EOS/DAPP trade pair. The better price is achieved by splitting and routing the trade order of 500 EOS by 70% to Defibox and by 30% to Bancor. Trading on Bancor would lead to a loss of 7.264%, a 56.977% loss for NewDex, and 82.380% for DeFis Network.
The current list of supported DEXes is:
DolphinSwap will be added next. In general, we strive to quickly add new DEXes as soon as they meet a minimum liquidity requirement.
Benefits of Nexus Exchange
Best Price Guarantee
Using Nexus Exchange EOS users get the best price for any token trade, usually even better prices than on any individual exchange due to automatically computing the most efficient swapping path and splitting the trade order. Users also don't need to spend any time researching which tokens are listed on which DEXes & which one offers the best price.
Nexus Exchange takes zero additional fees as we strongly believe taking any fee would defeat the purpose of a DEX aggregator by not being able to guarantee best prices anymore. Instead, Nexus Finance focuses on other novel revenue models and products which will be shared in a future post.
Nexus Exchange currently covers the cost of up to 5 transactions per day for each user. This enables a great user experience, especially for new EOS users as we cover all transaction costs and aggregate data from all EOS DEXes.
Nexus Exchange's routing algorithm is fully on-chain, implemented in an EOSIO smart contract. While we might be able to compute more sophisticated routing strategies off-chain, we think implementing the first version of the routing algorithm fully on-chain has several advantages:
It's decentralized and always on. It does not rely on a single server.
It serves as an important DeFi building block for other EOS DeFi applications to use. The interoperability of Nexus Exchange with any other smart contract enables the true power of an open, decentralized finance ecosystem on EOS.
The trust in Nexus Finance is removed by releasing the code to the public. The code is open-source and verifiable by anyone. All trades on Nexus Exchange are atomic, i.e., in a single transaction. This way tokens never stay in one of our accounts.
Whenever you send a transaction, you specify the minimum amount of tokens to receive. If your account receives any less, the whole transaction will fail. This secures your funds and guarantees that you will always at least receive the specified amount of tokens.
The actual routing algorithm lives inside of a second smart contract which is closed source for now to avoid competition. However, we want to stress that it is irrelevant for the security aspect of the platform, as all transactions go through the open-source gateway contract. This way get the best of both worlds: we avoid leaking the core of our intellectual property to potential competitors without compromising on the verifiability of the user's security.
Lastly, please note that the platform is still new - use it at your own risk. Leaving feedback is best done via our Telegram channel. Subscribe here and follow our Twitter account to receive updates on Nexus Finance. We have a lot planned for Nexus Exchange and other DeFi products and will publish a roadmap in the next months.