- Blockstream’s Liquid welcomes Bitcoin on DeFi with a new decentralized exchange, TDEX, launched on Monday.
- The DEX introduces a fixed price strategy and atomic swaps to provide liquidity on the exchange.
- However, TDEX is not natively built on the Bitcoin blockchain.
Blockstream announced its entry into the DeFi ecosystem with the launch of its decentralized exchange, TDEX. The exchange, built by Sevenlabs, a consultancy and licensing firm dealing with crypto, launched its Open Alpha Phase on September 7, 2020.
TDEX launches on Liquid network
According to the statement at launch, TDEX will leverage atomic swaps allowing users to send faster transactions and decentralize the exchange altogether. Atomic swaps is a peer-to-peer exchange network being tested on Bitcoin that allows direct exchange of crypto without the need for a central party like an exchange.
These atomic swaps will be used on TDEX, replacing the widespread Automated Market Makers (AMMs) used on Ethereum-based Uniswap DEXs. The swap protocol, TSWAP, will harness the benefits of ad-hoc atomic swaps allowing two parties to trade without the need for a third party directly.
This ensures the trades are settled without the risk of having a faulty AMM giving users total control of the trading activities. Speaking on the launch of TDEX, CEO of Sevenlabs, Claudio Levrini said,
“TDEX leaves to the liquidity provider full control on using a fixed price strategy or add external price feeds and custom trading logic.”
Can Liquid’s TDEX outshine Uniswap?
Blockstream CEO, Adam Back, has once and again professed his undying love for Bitcoin as the top functioning crypto project. At the launch of the Liquid-based TDEX platform, Back said the exchange would increase the number of DeFi projects on Bitcoin’s second layer platform. He said,
“TDEX is an exciting example of the increasing number of DeFi solutions emerging on Liquid — or as we like to call it, LiFi.”
Several competitors stand in the way of Liquid reaching the top, starting with Uniswap, which currently trades over $150 million daily in ERC-20 tokens swaps. Wrapped BTC (wBTC) or BTC on Ethereum, has grown into the most extensive “form of BTC” due to the growth of DeFi products. Currently, wBTC held on ETH is more than the combined total of BTC held in its layer two protocols such as Liquid Network and the Lightning Network.