Today I’m discussing something that even a strong DEX might consider: should we make a standalone chain?
The source of the discussion is this. On June 3, Sam Kazemian, founder of the algorithmic stablecoin protocol FraxFinance, tweeted a suggestion that SushiSwap develop and launch its own blockchain, Sushichain, to facilitate exchange with other blockchain assets.
Dave Liebowitz, head of business growth at the Gelato project, then posted a corresponding proposal on the SushiSwap discussion board and said that such a move would solve SushiSwap’s current problem of liquidity fragmentation across blockchains.
Indeed, when the proposal was launched, the value locked up by SushiSwap deployments on the Ether, Polygon and Fantom blockchains was $4.3 billion, $649 million and $65 million, respectively.
But as of today, SushiSwap has over $1 billion worth of locked-in positions on Polygon.
This clearly shows that there is a need for many assets to be traded besides Ether, and SushiSwap-like DEXs are in desperate need to hit other ecological asset standards.
It seems that getting a chain is the only way to go?
Let’s start with how we can achieve cross-chain asset trading without getting a new chain.
There are three ways.
- Cooperate with Ether’s ptoken-type protocol.
In this way, users need to send a ptoken to other chains and then trade in SushiSwap on Ether. The process is slightly complicated and the gas fee may be high.
- Create cross-chain locking contract.
Cross-chain locking contract, refers to hash locking, in fact, will also be the assets in the contract, and then through the number of changes in the ledger to adjust the transaction. This process still has to be done on Ether, and will appear to be the same as 1.
- Use other cross-chain bridges.
If you use other cross-chain bridges, you need to deploy SushiSwap on this cross-chain bridge, and then this “bridge” will link to other chains, however, there may be some impact on the user’s process. However, this may have some impact on the user’s experience, because cross-chain confirmation is more troublesome. The use of other chains will also lose some initiative.
In order to achieve the best initiative, it is probably the best choice to develop a chain.
And how to do it?
For example, it is easier and faster to build a side chain. This is like Polygon’s current PoS sidechain, which is easier to deploy as an application. And it links directly to ethereum users. If you face assets from other chains, you can build a bridge by yourself or deploy a ptoken-type contract so that assets from other chains have anchor assets on the sidechain.
The first idea, if you need to get a little more complicated, is to make a chain that specializes in cross-chains. This chain can interconnect with all other chains, mainly because it can verify the legitimacy of data on other chains. An interesting example is O3swap based on polynetwork, SushiSwap requires a new polynetwork.
Raising the difficulty a bit more would cost more in terms of cost and time, and that is to choose a cross-chain ecology to participate, for example, developing a chain with Cosmos SDK and joining Cosmos ecology, because Cosmos ecology will have cross-chain bridges for executing ethereum and polynetwork in the future, which means that Cosmos is able to realize the asset interoperability needs of SushiSwap.
An exception option is to go to the Polka ecology and develop a parallel chain with Substrate and use the same slot with other chains, or bid for a slot yourself. In this way, the cross-chain asset interchange capability of Polka’s ecosystem can also meet the needs of SushiSwap.
However, under the relatively slow progress of Cosmos and Boka’s ecology, the future cross-chain asset transfer will definitely have some discomfort for users to use because of the complicated process and some cross-chain security considerations.
We have mentioned several options, but for SushiSwap, actually the market share seems to be more attractive. The demand of cross-chain market, is very huge, for example, for polynetwork, simple asset interchange, has exceeded 5 billion dollars since it was launched last year, for SushiSwap, what is more important is the transaction volume and locking position.
With something like uniswap, trading volume skyrocketed during the 519 crash, but many other assets would not have been able to sell their assets through this liquid and well used DEX. With cross-chain interactions and asset exchanges, it must be a place where DEX must compete for incremental volume.
At the beginning of this year, IRISnet’s cross-chain DEX Coinsawp went online, but because of ecological reasons, there are not many users, and now there is an urgent need for cross-chain exchange, and the center of SushiSwap is Ether, but Ether’s cross-chain is also very expensive and slow, so it is really difficult if we don’t make a new chain. The next step is to see how the community’s opinion is. If SushiSwap engages the chain, then also because of the chain, SushiSwap’s footprint will, for sure, expand further. Because if a chain that works well outside of ethereum can be engaged without permission to coin, then the potential of this DEX is endless.
Wait for the results.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/does-sushiswap-need-sushichain/
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