Dexalot AMA #1 — Project Overview with M.
Dexalot AMA #1 — Project Overview with M. Nihat Gurmen (CEO), Cengiz Dincoglu (CTO) & Firestorm (Advisor)(Recap)
On 2/17/2022 at 12:00 p.m. (PST), an AMA session was held on Avalaunch with special guests M. Nihat Gurmen (CEO), Cengiz Dincoglu (CTO) & Firestorm (Advisor), Team Dexalot. Below we present to you an excerpt from AMA with questions and answers.
Dave Donnenfeld | Avalaunch
Hello and welcome everyone to another most excellent AMA brought to you by Avalaunch in association with the good people of Dexalot. It is a genuine pleasure to be finally launching this project; it has been a long time in the works for us and moreso, for them. It is indeed an all-star cast and we were fortunate enough to have enough connections to get not one, not two but three officers of Dexalot as guests here today. We are joined by @FireStorlvl @hydrofoilracer and none other than @the_axol0tl today and I’ll let them do the talking. We’ve already exchanged pleasantries in the proverbial war room so let us get right into it…
As you all can see…Today, we start our AMA with 3 members of the team. Thanks for being here. Can we start with a brief introduction about who you are, what your academic background looks like, and how your experience brought you to the crypto space?
The Axolotl| Dexalot
Hello again. Let me start it off introducing myself.
I am one of the co-founders of the Dexalot project.
I have a PhD in Chemical Engineering and I am coming from a corporate background in the Oil & Gas sector.
Before that I was in the academia at University of Michigan.
It seems every 7–10 years I make major change in my industry.
After Oil & Gas I did that change towards blockchain…
Crypto space was a natural fit for me as it epitomizes innovation and collaboration.
Dave Donnenfeld | Avalaunch
We’re of course glad you made a switch. I couldn’t have waited another 7–10 years for Dexalot. ?
Quicksilver| Dexalot
I am the CTO and the other co-founder of this project.
I have worked in Wall Street for almost 20 years building electronic trading systems on the IT side and I have also held a quant position at JPMorgan’s Statistical Arbitrage Trading Desk
This is my 5th trading system in the last 20 years. I believe, having traded my own HF algorithms, using, in some cases, an electronic trading system that I had personally built gives me a distinct set of tool sets that will contribute to the success of Dexalot.
I left WallStreet 3 years ago as I didn’t see the upside for myself and kitesurfed and hydrofoil raced for almost 2 years while keeping my entrepreneurial aspirations alive with a few non-crypto projects.
Dave Donnenfeld | Avalaunch
You have a dream background and an adventorous spirit. You are in the right place.
FireStorm| Dexalot
Hi all! I am one of the advisors for the Dexalot project focusing on everything and anything I can help with but more so on strategy, partnerships and product.
I am an engineer by training, spent a little over a decade on Wall Street focusing on equities and FX trading and more recently I served as a lead for an algorithmic trading team.
I’ve been part of the Avalanche movement for a long time now, I was working with some of the fantastic developers at Ava-Labs and I spent a good amount of time spinning nodes and breaking things to help them out. I actually was awarded the “MVP” title on the Avalanche discord channel early on, and quite frankly, this is by far my proudest achievement!
I also worked on a decentralized exchange project on Ethereum which also was a CLOB and had some great perspective as to what CLOBs really need to succeed on blockchain. Since then I’ve been eagerly waiting for the right blockchain with the right speed, finality and capacity to arrive so that I can be part of a CLOB project that is decentralized and doesn’t compromise on the look and feel we all expect from the CEXs. Luckily, I had the privilege of connecting with Nihat & Cengiz over the summer, and they were gracious enough to listen to some of my opinions and ultimately allowed me to join the team to make the decentralized, transparent and order book based trading vision a reality!
Dave Donnenfeld | Avalaunch
Nicely done all. Can you please describe to us what Dexalot is about and how its idea came to existence?
Quicksilver| Dexalot
Dexalot is a revolutionary decentralized exchange based on a central limit order book (CLOB). CLOB is the type of order book a user would see on centralized exchanges like Binance.
Dexalot brings the capital efficiency of this type of order book to the Avalanche blockchain via an on-chain implementation with the look and feel of centralized exchanges.
As for how it started, The CEO and I go back 30 years. He called me last year and we initially did an avalanche staking node with an overly unnecessary frontend 🙂
Having caught the blockchain and particularly Avalanche bug, we then decided to go into something much more elaborate. Our very first code checkin was actually on December 25th of last year. And a year later here we are….
Dave Donnenfeld | Avalaunch
Your friendship and working relationship are inspiring. @dubpluris and I have a long way to go yet.
As a decentralized exchange but with all the benefits of a centralized exchange, Dexalot is taking on a huge leap to say the least. Can you give us a high-level overview of how this might be achieved?
The Axolotl| Dexalot
In short, it requires additional effort. To start with, Dexalot smart contracts are completely custom written from scratch. So it took more time.
Everything we provide in addition in the frontend such as charts, trade history, analytics are complementary for the everyday user.
The frontend directly interacts with the smart contracts for real-time trading purposes, and our backend feeds the front end with the data that has already been confirmed on the blockchain.
Dave Donnenfeld | Avalaunch
If you were to pin-point the key features that makes Dexalot unique (besides being a DEX on Avalanche) what would your top picks be, and do you think these alone will place it above the competition?
FireStorm| Dexalot
There are quite a few to talk about but let me give this a shot!
First of all, Dexalot is a non-custodial, permissionless and most importantly order-book based decentralized exchange.
Therefore, the key advantage for users is that their assets will never leave the blockchain. There are no frequent, unexpected maintenance periods that block deposits, withdrawals or trading in general.
For the trading functionality, order books allow native limit orders, which means that users can control the EXACT price they are willing to pay for their trades as well which isn’t exactly possible with alternatives.
Separately to this, we are building Dexalot Discovery which is a solution for fair listings and launching of assets, and it is by far the closest solution to real market trading of assets vs. the competition.
It is intended to be a completely barrier-free (no special requirements, no staking tokens etc.) mechanism that eliminates the advantage of speed and allows anybody to participate over a period to buy or sell investments.
Dexalot is integrating with Avalaunch for this specific feature as well which sets it apart from other solutions as well.
One addition to the Dexalot Discovery point is that we as a team also understand this is novel, and hasn’t been done before. Therefore before asking other projects to take-on this “new solution risk” we decided to list ALOT with this mechanism first to prove its capability.
Dexalot team as a whole believes it is important to also lead by example, and we want to make sure that we aren’t pushing solutions that we ourselves don’t use to the community and frankly there are too many examples of this across the crypto ecosystem nowadays.
Lastly, I also want to harp on the quality of the team, we have folks like @the_axol0tl and @hydrofoilracer, who by themselves have MORE institutional experience combined than most other projects out there.
We have @jdackerman who is our CMO who has a decades worth of marketing and community building experience from RedBull.
We have @TimS347 who is our COO who has spent decades running operations for large businesses and hedge funds. One of the key things that will set products apart in the future is their ability to scale and their ability to mesh with the future institutional requirements and this team truly has the background to get to that point and drive adoption
Dave Donnenfeld | Avalaunch
We’ve identified the fastest typist on the team. Well done @FireStorlvl way to make an entrance. And the team here is worth highlighting; even gushing about. So much of this is execution; particularly an endeavor like a DEX.
Amen. Since the mainnet went live several months ago, there are currently three pairs added to the exchange. What are the plans for adding more, and can you describe the process? Is this open to external liquidity providers?
The Axolotl| Dexalot
The first pair of Dexalot (AVAX/USDT.e) was listed as part of the deployment process.
The deployment script was designed to deploy the smart contracts, add the first pair and transfer the ownership of the exchange to a 3-of-4 multisig wallet. With that said, any new trading pair needs to be listed through an approval process by this multisig wallet.
Dexalot project members collectively hold only one out of 4 keys required to execute any operational decision for the exchange. Dexalot values community participation and there will be a transition to governance that will guide the decision making of the multisig. I hope this gives an idea about the decision proces.
Dave Donnenfeld | Avalaunch
You demonstrated some good speed. Deliberate, measured and thoughtful. Appreciate it.
As of today, the current volume stands at just above $15M. What plans do you have in the works or looking to deploy in the near future to increase the total volume passing through the exchange, and can you provide a timeline for these strategies?
FireStorm| Dexalot
So volume is the lifeblood of exchanges and trading of course.
In TradFi volume is attained through providing an exemplary service and this is one area where DeFi or crypto is no different.
The goal with Dexalot is to provide capital efficient and good pricing, so that our users get trades that are better than the alternatives.
To that effect, we are working on a few things, first of all, we launched with our own market maker which already at times has better pricing than alternative means of execution.
Second, we have been working with institutional market makers whose only mandate is to provide deep liquidity with as tight a price as possible.
We already have one partner who is assisting us with our own listing, who also will assist with any other project that will list with Dexalot as well.
We are also negotiating partnerships with at least 5 other teams so that we can maximize the robustness of liquidity on our platform.
Besides the professional grade market making, Dexalot obviously wants to list more assets, we are already engaging with many projects who want to use Dexalot Discovery to do their fair and transparent listings, and we are also looking to add more trading pairs to the exchange.
Additionally, we are looking to integrate with key names in the ecosystem such as aggregators and lending protocols so that users still get the best possible execution.
When you add all these up, you get more volume. Volume begets more volume and with more volume, our solution will get more compelling for our users in an exponential manner.
Dave Donnenfeld | Avalaunch
Was about to ready to spit @FireStorlvl Boom with the answers. Thank you for all that info. This is what Dexes promised to be a few years back anda it never quite came to fruition. Let me ask — What does the fee structure-system look like? Is there a benefit to holding the Dexalot native token?
The Axolotl| Dexalot
The utility of the ALOT token are as follows: gas token in subnet, delegation/staking rewards in the subnet, voting power in governance and incentivization mechanism for usage and staking on the dexalot platform.
We decided to fast-track Dexalot Discovery more than anything thinking that it will be the biggest impact on the ecosystem.
Therefore, most of these features are not immediately available at the launch time. But shortly after launch we will refocus and deliver them.
Dave Donnenfeld | Avalaunch
Don’t let anyone pressuring you into typing faster.?Appreciate the additional detail on the utility. Speaking of the native token, its utility expands beyond that of accessibility. Can you expand on its use within the governance layer?
Quicksilver| Dexalot
The long-term vision is for holders of Dexalot Token (ALOT) to determine the destiny of Dexalot through proposals and voting on affecting the future direction of the project. These proposals will also be the mechanism for allocating funds for research and development to enhance the Dexalot project.
The project is planning on using the OpenZeppelin governance framework. In our view there are two key aspects that need to be in place to ensure success of the governance model:
- The parameters of the governance framework need to be tuned to foster community participation.
- The community needs to be ready to take this responsibility. We hope that this will happen organically as the community matures and feels ownership of the project.
Dave Donnenfeld | Avalaunch
The numbered list people always bring the heat. Thank you for that
What do you feel are the next steps in the evolution of Dexalot, and how do the current plans look to help you get to that goal? Will there be a structured roadmap made available to the community looking to get involved with the project?
FireStorm| Dexalot
Well we have Dexalot Discovery (DD), about to be release and ALOT will be the first listing through DD after we launch with Avalaunch.
If you don’t know Dexalot Discovery is a fair price discovery mechanism for newly listed assets.
It was born out of the necessity we observed in the Avalanche (and other) ecosystem where fantastic teams and projects are getting really bad outcomes for their communities when they do their initial listing of their assets on AMMs and start to trade their tokens before an established price.
DD intends to utilize the central limit order book (which is where ALL of the trading happens on TradFi due to its capital efficiency) concept in conjunction with an auction mechanism to fairly identify the price that a project token should be listed as.
By doing the auction over time, the intention is to prevent bots from scalping on retail users, overloading the network and causing massive fee spikes at the time of listings. We believe it is a huge step forward to using the potential of Avalanche itself and providing a solution to our community.
Quicksilver| Dexalot
I would like to quickly add
After we launch DD we would like to focus on our subnet implementation before providing any additional features with the exception of Limit FOK (Fill or Kill) orders. This may go out at the same time with DD release.
We are focusing on the Subnet because we can control the gas cost better and will have tremendous speed improvement in addition to giving us much needed flexibility to deliver additional features.
Dave Donnenfeld | Avalaunch
You can cut in any time. No one owns the floor; someone’s got to take it. ? Do you think having built the DEX on Avalanche has given Dexalot other advantages beyond those of low cost, high finality and speed?
The Axolotl| Dexalot
I can think of 2 things. The first is : The build team of avalanche is hands-down top quality. They are knowledgeable, visionary, quick and responsive.
The second is, there is an amazing community in Avalanche that not only believes but also builds on it non-stop.
Also, as everyone on here can imagine, we are lucky and honored to have Avalaunch as a partner which is a huge edge for projects to launch and succeed.
I said two but the third one is really important. I really mean it.!!!
Dave Donnenfeld | Avalaunch
Appreciate the conviction! Let’s move onto the final question before the Twitterverse asks the occasionally strange questions…Last but not least, what do you envision as the next milestone? And is there anything else you’d like to discuss in this AMA chat that we haven’t yet had the opportunity to cover?
Quicksilver| Dexalot
We pretty much covered everything but to quickly summarize :
- Successful launch of Dexalot Discovery along with our token next week
- Subnet migration
- And Governance along with continuing to improve the UX
and then we can think about adding additional products
Twitter Questions
@AmaPemburu who asks — Will there be futures trading in the future?
FireStorm| Dexalot
In the near term, the answer is no.
Derivatives are classified as securities in the US, we are staying away from regulated securities for the moment.
However, we have expertise in derivatives within the team and will keep all such products in mind for the future and depending on changes to regulations.
@BoycaIsBack — As a DEX, it cost gas fee for each transaction including canceling an order which is so absurd. What you will do to avoid that?
The Axolotl| Dexalot
Well… Gas fees is part of crypto and we can’t really avoid it.
We suggest watching gas costs on Snowtrace and transact when fees are low. In fact we are planning to show current gas on our front-end just like we do by showing the current AVAX prices on Coingecko.
With that said, once we go to our own subnet, you will see substantially lower and more consistent gas.
@tmcnylmz wants to know — Will you serve for only Avalanche network assets?
FireStorm| Dexalot
haha i guess im the “no” guy today
We are building Dexalot for all of crypto.
Obviously since we are building it on Avalanche, we are more focused on its ecosystem in the near term. But our ultimate goal is to offer users the same CEX experience in terms of speed and usability (meaning listing many more pairs).
@cryptotrung — How @dexalotcom deal with gas peak at some moment on Avalanche network, specially at listing time?
Quicksilver| Dexalot
As an exchange, we are open during high and low gas environments. It’s up to the users to decide when they wish to trade.
But again, once we get to the subnet in the not too distant future, users will be able to experience lower and more consistent gas fees.
@Ahmetogrtm — How many active user accounts do you have on your platform and what are your plans to attract more users?
The Axolotl| Dexalot
Right now we have about 2000 daily users, which is small. But we just launched and started to get our name out.
We have a full marketing effort that’s just getting underway and is being coordinated by our outstanding CMO, Jonathan. We are also onboarding a few market makers to provide good liquidity to the order books.
And we’ve partnered with great projects like Avalaunch to guide us and help us grow. Lastly and probably most importantly, we always welcome engagement and feedback from the community.
The community was there from day 1 when we only had a testnet version, and we are very appreciative of that and hope to continue this voyage we are on together.
Telegram Questions
What is the biggest weakness of your project and how do you plan to enhance it?
The Axolotl| Dexalot
This is a good one to answer. For our project the biggest weakness is the high gas environment. A CLOB dex needs to have constant market activity to have tight spreads that users would appreciate. It is difficult to achieve that especially when you have high gas fees. Our subnet implementation as well as incentivization scheme with ALOT token will help to alleviate this challenge…
Have you being audited ? Have not heard you talk about that security of funds is what every investor craves for and plans to escape incase of insecurity if funds,scams and rug pulls ? How strongly built are your security put in place?
Quicksilver| Dexalot
We are very big on security and Yes, we have been audited multiple times before we went live in December and we are auditing our new functionality Dexalot Discovery as we speak. All of our transactions are on chain and we don’t take custody of any funds. In addition our backend infrastructure servicing our is tightly monitored for any type of attacks.
What is your strongest advantage that you think will make your team leading the market?
Quicksilver| Dexalot
Our team is our strongest advantage. We have +50 years of institutional expertise in this field and we are already building a community that wants to drive us to the future
What are the benefits of holding your token as long term investment? Can you tell us about the motivation and benefits for investors to keep the your token in the long run?
The Axolotl| Dexalot
The utility of the ALOT token are as follows: gas token in subnet, delegation/staking rewards in the subnet, voting power in governance and incentivization mechanism for usage and staking on the dexalot platform.
Token Burn and BuyBack program play an important role in increasing Token value Do you have a token burn or buyback program plan to attract investors?
The Axolotl| Dexalot
It is one of the mechanisms we are considering. Additionally, we have active projects on staking as well.
Dave Donnenfeld | Avalaunch
Congratulations
Quips aside, it was an absolute pleasure having you all here today. And to see three team members take time out like this to engage with our community is an honor. I thank you all personally and also, by proxy, from our Avalaunch faithful. Thank you all very much!
Quicksilver| Dexalot
Thank you , I personally enjoyed our conversation very much
The Axolotl| Dexalot
Thank you all.
About Avalaunch
Avalaunch is a launchpad powered by the Avalanche platform, allowing new and innovative projects to seamlessly prepare for launch with an emphasis on fair and broad distribution. With its values deeply rooted in the early Avalanche community, we are able to offer projects confident, informed users who are aligned with the long-term goals of the rapidly expanding application ecosystem.
Leveraging Avalanche’s scalable, high-throughput, and low-latency platform, Avalaunch is built by users, for teams, to help grow strong communities.
Dexalot AMA #1 — Project Overview with M. was originally published in Avalaunch on Medium, where people are continuing the conversation by highlighting and responding to this story.
