A decentralized exchange built on the Liquid Network will open for early access on Monday.

A project called TDEX announced that it is entering the Open Alpha scene. It was built by Sevenlabs, a company that provides consulting and labeling services as well as ongoing work.

The stock market provides a somewhat unique development to the automated market makers who currently dominate the stock exchange trading volume on the web. The TSWAP protocol used by Oslo Bowers focuses on one-time nuclear exchanges, which is a method of trade between two opposite parties without intermediaries.

Unlike AMM, there are no mathematical formulas that define a specific exchange rate. As Claudio Levrini, CEO of Sevenlabs, told Cointelegraph, “TDEX leaves the liquidity provider full control over whether to use a fixed price strategy or add external price flows and custom trading logic.” The downside to this is that securing liquidity on the platform is likely to be more difficult than platforms like Uniswap.

Nuclear exchanges are often suggested as a decentralized way to exchange assets for Bitcoin and other UTXO blockchains. While implementation remains limited, the Taproot and Schnorr proposals may allow for simpler mechanisms through adapter signatures.

Adam Buck, Blockstream CEO, said, “TDEX is an exciting example of the growing number of DeFi solutions coming to Liquid – or as we like to call it LiFi.”

However, the relative level of fluid centrality has been criticized in the past, particularly in the context of introducing concepts traditionally associated with Ethereum as non-innate symbols.

Liquid is a Bitcoin side chain that relies on a consortium of “administrators” to protect your flash drive and validate your network. These officials are business units linked to Bitcoin, especially exchanges. The Union and Connectivity System design represents an important point of trust in the network, as the incident in June briefly made Blockstream the only controller of 870 BTC in the network’s reserves.

Often pushed by some in the Bitcoin community to create “Bitcoin DeFi”, which may open the network to the world of decentralized trading and lending thus far mainly seen on Ethereum.

Atomic loans are currently one of the few projects to use the original Bitcoin as loan collateral, although it does use Ethereum for the rest of the logic. Other Bitcoin DeFi ventures include MoneyOnChain, RSK’s counterpart to MakerDAO and now TDEX.

None of these projects are based on Bitcoin, mainly due to the limitations of smart contracts. These same limitations make it difficult to build bridges of trust in the blockchain by forcing side keychains to use unified communication mechanisms.

But it is clear that the demand for Bitcoin in DeFi is high, as evidenced by the success of WBTC. Ethereum contains more locked Bitcoin than Liquid and Lightning Network combined. It remains to be seen if the demand for DeFi for Liquid will be as strong.

Source: CoinTelegraph

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