Decentralized derivative protocol is becoming homogeneous. Can ZKX stand out from the crowd by taking a differentiated approach?

The current decentralized derivatives track can be mainly divided into two solutions from the protocol type perspective:

• The Vault mode represented by GMX, with LP as the counterparty for traders, and the trading price determined by the Oracle feed.
• Represented by the dYdX, the order book model matches off-chain and settles on-chain.

Although these two solutions are widely adopted by the market, there are some potential risks. The Vault mode is susceptible to Oracle price manipulation, resulting in losses; while off-chain matching of order books with on-chain settlement lacks transparency.

Running in many decentralized derivatives protocols, the influence of a single protocol is limited. The entire on-chain derivatives trading market is still in a wild west era, and the market pattern is not yet determined. How to win in this competition is a huge challenge for each existing protocol, deciding the future.

ZKX, a derivatives protocol based on the Starknet ecosystem, also adopts the order book model, but provides users with an on-chain trading experience and security comparable to or even surpassing that of CEX through differentiated deployment. OG Trade and Pro Trade offer users multiple trading options at different levels; ZKX AppChain records all trading processes on-chain, with both transparency and security; ZKX accounts and Starkway provide seamless onboarding channels and simplified procedures for new users.

ZKX Background Information

ZKX was founded in 2021, with two founders Eduard and Naman previously holding leadership positions at SOSV, one of the top global venture capital firms with assets under management exceeding $1.2 billion. The core team consists of experienced individuals from companies like PayTM, Flipkart, and Byju’s, spanning across 8 countries.

ZKX received funding from StarkWare (the parent company of Starknet) in April 2022. In July 2022, ZKX completed a seed round financing of $4.5 million, with investors including StarkWare, HashKeyAmber Group, Crypto.com, DragonFly Capital, and AshwinRamachandran, General Partner.

ZKX provides a more interesting trading experience for users by offering gamified trading options, making trading more social. By leveraging ZKXAppChain, ZKX combines the efficiency of CEX with the self-custody and trustlessness of DeFi, offering greater scalability and high-speed API. ZKX is currently deployed on Ethereum and Starknet. According to official data released by X on June 5th, in the past 30 days, ZKX’s volume reached 23 billion USD, with over 24.6K ZKX account creations and over 2 million transactions, and the volume of STRK alone exceeded 3 billion USD.

ZKX’s protocol token $ZKX TGE will take place on June 19th and has been confirmed to be listed on both Kucoin and Gate. The first airdrop promised to users has also been distributed to their accounts on June 17th at 3 PM.

OG Trade & Pro Trade

Typical on-chain derivatives platforms usually adopt static trading interfaces, and traders of different levels are forced to use the same interface without any choice. ZKX innovatively divides trading into OG Trade and Pro Trade for different levels of users to use.

OG Trade makes short-term and swing trading more simple and fun by introducing gamification elements. OG Trade offers 30-minute trading competitions and provides visual real-time trading data on the interface to help novice users gain trading profits quickly.

Unique gold, silver, and copper badges can be earned for profit, loss, and volume, each category being distinct. These badges signify the value of users as traders in the OG trading competition.

Pro Trade is designed for more experienced intermediate and advanced traders, including all types of orders, complex trading functions, public APIs, advanced tools, etc. Professional traders, large fund players, and proprietary trading companies can easily trade on Pro Trade.

OG Trade and Pro Trade meet the needs of different types of traders in two different ways. Nevertheless, users do not need to worry about liquidity and depth issues, as both trading methods share the same on-chain order book in ZKX.

ZKX AppChain bridges the gap between performance and security

Some on-chain derivatives protocols adopt order book models to improve performance, such as dYdX, Aevo, etc., but they all operate in an off-chain matching and on-chain clearing mode. The off-chain matching process lacks transparency and has a certain risk of misconduct. ZKX perfectly bridges the gap between performance and security through ZKX AppChain.

ZKX Appchain is a full-chain layer developed using Substrate SDK, seamlessly connecting users to ZKX through multiple L1 and Rollup. Its stack includes an intermediate layer responsible for synchronizing assets and status data between Starknet and parallel Rollup and ZKX AppChain built using its SDK. Therefore, ZKX AppChain is actually an L3 public chain based on the Starknet ecosystem.

ZKX order book runs entirely on ZKX AppChain, where ZKX transactions are not subject to any on-chain speed and gas cost limitations, so ZKX users can still enjoy smooth gas-free transactions, continuous liquidity, and operability even if there is congestion on the chain.

ZKX has been expanded to support 3 blocks per second and over 2000 API requests every 10 seconds, providing users with efficient gas-free transactions that rival the trading experience of CEX while ensuring the security of user assets.

ZKX AA account

While most on-chain derivatives protocols are adopting various strategies to attract new users, the barrier to on-chain operations is extremely high, which is the fundamental reason why new users cannot transfer their trades from CEX to on-chain. How to lower the entry barrier for new users and allow them to seamlessly experience the decentralized trading system is currently the focus.

Account abstraction provides a seamless experience similar to CEX, while also offering the security and privacy provided by DEX, which is a necessary condition for the widespread adoption of blockchain. ZKX is the first decentralized derivative protocol to integrate account abstraction. It utilizes Starknet’s native account abstraction and Starkway as the L1 to L2 bridge. ZKX AA accounts are currently deployed on the Starknet mainnet using Cairo 1.0. In the future, it will be expanded to other L1s and more Rollups, providing users with a seamless cross-chain trading experience.

Using ZKX AA accounts can simplify the process of recording private keys for users and simplify the process of funds entering. As a decentralized account of Ethereum L2, users can seamlessly bridge to Starknet and eliminate multiple complex steps, directly using ZKX AppChain to start gas-free transactions. ZKX AA accounts will also become a one-stop DeFi application hub for users, with features including staking and other DeFi products, in addition to perpetual trading, all contained within a user-centric DApp.

Starkway native cross-chain bridges

In the era of multi-chain, cross-chain bridges are important infrastructure for connecting blockchains. Starkway consists of Solidity smart contracts on Ethereum and Cairo contracts on Starknet. Through the L1-L2 message passing mechanism provided by Starkware, Starkway can help users seamlessly transfer funds between L1 and Starknet through a trustless and transparent mechanism.

Currently, users can easily deposit from Ethereum L1 directly to ZKX AA account on Starknet using Starway, and use it in ZKX activities such as airdrops and clan NFTs. Starway also has a messaging function, which allows ZKX to check the eligibility of L1 wallet and allocate rewards accordingly.

Through Starkway, ZKX has connected the inflow and outflow of funds, and different chains are no longer barriers to funds. Users can seamlessly experience any service provided by ZKX.

At the end

Decentralized derivatives trading market is on the eve of explosion, with the potential to rise to trillions of dollars. Currently, the overall pattern of on-chain derivatives protocol has not been determined, which provides valuable opportunities for innovative projects and is also a critical moment for market share competition.

ZKX’s core advantage lies in using the decentralized order book, with high performance and high liquidity, combined with ZKX AppChain and ZKX AA accounts, allowing users of the entire chain to use ZKX services in a simplified process, safely and seamlessly. Provide users with smooth and gas-free transactions comparable to CEX, as well as the security and decentralization of DEX.

Through unique differentiation strategies, ZKX is committed to addressing the issues and risks in existing protocols, and is a strong competitor in the decentralized derivatives track.

ZKX Token will be listed for trading on June 19th. The total supply of $ZKX token is 100 million, with a relatively small initial circulation. The IDO valuation is $50 million, which is reasonable. You can follow it after it is listed to observe the price.