How zkSync and StarkNet can unlock P2P trading without compromises.
One year ago, the ZigZag team began reimagining what they saw on Uniswap. Yes, to trade without lengthy onboarding was revolutionary, harkening back to the days of EtherDelta, but Uniswap’s UI lacked… information. Without an order book, trade log, or DOM indicator, a flow trader would be helpless to calibrate a good entry or exit.
Of course, Uniswap v.1 was working with serious limitations: on-chain matching, high gas fees, and an untested security model, and Uniswap v.2 is markedly more efficient and complete. Still, we suspected the job could be done better with L2 technology.
On January 22, we announced a vision for a new approach to decentralized trading.
On the Leading Edge
When Uniswap reached its growth stage, scaling solutions were nascent; optimistic rollups were gaining traction as a way to scale Ethereum, and so were zk-SNARKs. Both technologies purported to let users retain custody of their own coins during order execution without increasing counterparty risk or delaying settlement.
But while optimistic rollups grew quickly in hype, they also had significant downsides at scale. Fees compounded on fees, making an exchange more expensive to operate as it grew. Approaches which used Zero Knowledge Proofs had the opposite quality, becoming more economical at scale. With ZKP, an opportunity for a new kind of DEX emerged: high throughput, trustless, and low cost.
ZkSync was the first live protocol to attempt ZK rollups on ETH. It launched quickly, and came with a built-in swap contract that saved time rolling our own. Users flocked to zkSync — in fact, ZigZag Exchange has had over 500,000 unique addresses registered using a ZK key to date. It is the lynchpin of ZigZag’s first version, currently live now.
Soon after the engineering team discovered zkSync, StarkNet was announced, promising a large, open ecosystem and a new smart contract language, Cairo. And while StarkNet’s mainnet still lacks live bridges, the team decided to integrate both of these L2 chains.
Two Paths, One Destination
Both StarkNet and zkSync 2.0 support our long term vision for a DEX. We believe that pseudonymous P2P exchanges are critical to the liquidity of the crypto-network ecosystem, and we believe that such a platform need not be inferior to centralized alternatives. The team’s priorities are borne out by our flagship features, which are (or in some cases, will be) enabled by zkSync and StarkNet.
Here are those priorities:
Permissionless Listings. There is no approval process to trade a pair on ZigZag — almost any ERC-20 can trade there with just a few minutes of work. If you don’t see a pair you like, see this guide on submitting listings.
Fully Non-Custodial. Like any DEX, you can connect with Metamask to trade, and maintain control of your own funds.
Market-Maker Bot Included. Traditionally, writing a reliable market-making bot takes years of experience and specialized skills. ZigZag ships with a market making library pre-written, so that any coin-holder can host and deploy their own by merely copy-pasting code and changing parameters. Check out the tutorial here for more details.
Advanced Interface. We look up to the DYDX developers immensely for their well-crafted trading UI, which surfaces most of the information you’d expect in a traditional futures exchange, without the cluttered look of other exchanges. (Check out a preview of the new UI here.)
Exchange Tokens of Value. Traders who became enfranchised in the native $DYDX token are partly responsible for the exchanges’ popularity; its perpetual contracts markets are deeper than even top CEXs. While ZigZag has not launched a token, it would follow the DYDX playbook if it did.
Liquidity Pools. One of ZigZag’s major milestones will be the launch of the Mammoth Pool this month. Written in Cairo by the brilliant @0xTonysprocket, this Automated Market Maker (AMM) allows anyone to deposit wBTC, ETH, or stablecoins to earn a pro rata share of swap fees. Whitelisted market makers can draw from this pool and place exchange orders without needing to onboard their own liquidity. (Mammoth Pool will be available on the StarkNet implementation of ZigZag only until zkSync 2.0 launches.) Watch @ZigZagExchange on Twitter for an announcement on launch.
Tighter Fills. In randomized testing, our matching engine (built on top of zkSync 1.0) routinely fills orders at 5–7bps below Uniswap. On a $1M trade, that’s $700 in savings. For makers, who are accustomed to doing hundreds of trades per day, the economics matter.
We acknowledge our goals are lofty, but the marketplace is hearing our message. Since going live three months ago, ZigZag users have traded over $1B USD in volume across 500,000 disparate wallet addresses. Why did this DEX achieve such rapid growth? We encourage you to find out first-hand: connect your wallet and start trading.
As we refine the roadmap for ZigZag, please let us know what you’d like to see. You can find us on Twitter @ZigZagExchange.
https://app.cyberconnect.me/address/0xB3ac1061ed0753C5A9f68da1EE176Bb8BD172D61