The founder of Ethereum (ETH)-based decentralized finance (DeFi) protocol Synthetix (SNX) has announced the launch of a new project that he says aims to compete with centralized exchanges (CEXs).
In a new blog post, Kain Warwick explains why he wants to launch an exchange when the Synthetix ecosystem already has Kwenta, a DEX that aims to provide zero-slippage trading for synthetic perpetual futures on crypto, forex or commodities.
Synthetix uses Ethereum layer-2 Optimism (OP), but Warwick says more value can be captured by building an exchange that users can access without having to directly navigate blockchain and DeFi.
“I’m sure you’re asking, ‘Why the hell do we need another front-end, we already have that [Kwenta]?’ I believe it’s time to compete directly with CEXs. But that means compromise. The infrastructure is ready. It’s time to switch to user acquisition mode.
Despite years of dragging it over broken glass, I still love Optimism. But Optimism is still an isolated island, far from the [Ethereum] mainland. Not everyone is ready to embark on a seven-day journey to reach this island, no matter how beautiful the beaches are. Are we waiting for these lazy people to come to their senses? I tried that. It didn’t turn out as well as I had hoped.”
The DeFi veteran suggests “Infinex,” the possible name for a Synthetix-powered centralized exchange that users can access with just a username, email, and password.
“The trader logs in with a username, password and email address – that’s all it takes.
Username and password you say?
To maximize the user experience, Infinex generates a new public-private key pair for each user and stores it in the browser on the client side. However, this key cannot withdraw money. It is only used to sign transactions sent to the Account Relayer on Optimism…
When the trader clicks on deposit, a unique deposit address is generated for them. They can send USDT, USDC or sUSD to this deposit address. These funds are dragged into the margin pool, controlled through governance.”
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Image generated: Midway through the journey