Atlas DEX: A cross-chain DEX aggregator based on SOL

Original Author: Crescent

Editor: 0x29

The world of DeFi is never static. As users increase their product usage and deepen their understanding, they become aware of the shortcomings of the products, leading to new demands. Products are continuously updated and iterated to provide users with a better experience and adapt to their needs, constantly moving forward.

We all know that centralized exchanges (CEX) have advantages such as faster transaction speeds, lower fees, a wider selection of assets, and a variety of product functions, resulting in a generally better overall product experience. However, we often hear news about exchange scams, exit scams, and hacker attacks, and people have become accustomed to the phenomenon of some CEX fabricating trading data.

In contrast, decentralized exchanges (DEX) effectively address these issues. All transactions occur on-chain, providing higher transparency, users manage their private keys, ensuring greater security, and there is fairness in trading. However, DEX is not perfect; it is constrained by technical bottlenecks, and the advantages of CEX are precisely its disadvantages. Nevertheless, as technology continues to improve, user experience is gradually getting better.

With the emergence of various DEX, users have more options, and at this point, DEX aggregators (such as 1inch) have appeared, aggregating different DEX to help users find the optimal solution for trading assets. However, even DEX aggregators can only trade assets on the same chain, so what about assets across multiple chains?

The Collision of Cross-Chain and DEX

At this time, cross-chain DEX aggregators have emerged, making it possible for users to conduct cross-chain transactions between different assets across different blockchain networks. Atlas DEX is one such cross-chain decentralized exchange aggregator based on Solana. Due to Solana's fast transaction speeds and low fees, it can provide a better user experience.

The project announced on December 12 that it would integrate Chainlink price feeds on Solana, Ethereum, and BSC to ensure fairness and accuracy in obtaining token prices in the market.

Currently, Atlas DEX users can exchange tokens on Solana for tokens on BSC, ETH, SOL, and Polygon. However, it currently only supports one-way cross-chain interactions and cannot perform reverse operations.

As shown in the image, the project is still in development, and only the SWAP interface is available for use. Features like STAKING, POOLS, and FARMS will be provided in the future, but they are not yet activated.

Atlas DEX allows trading from Solana and can connect to several wallets. To exchange for tokens on BSC, ETH, or Polygon, the receiving token address must be connected to Metamask.

When selecting the assets to swap, the conversion path will be displayed in the lower right corner, and clicking Swap will allow for one-click conversion.

Image Source: crypto 凉白开

As a cross-chain DEX, Atlas's main goal is to provide aggregated liquidity for users. The platform achieves the best trading prices by automatically splitting transactions and allocating them to different liquidity pools, thereby minimizing user slippage.

We know that typical DEXs use the AMM mechanism, and the core principle of AMM is a simple mathematical constant product function. If a trader executes a large transaction, it may consume a significant amount of liquidity in a single pool, causing slippage to increase exponentially.

Moreover, in a single DEX, if there is not enough liquidity in the token pool for the desired swap, there will also be significant slippage. Or if the DEX only supports swaps between A and B tokens, and B and C tokens, but not A and C tokens, this can cause some inconvenience for traders.

By dispersing transactions through the project's mechanism, these issues can be easily resolved. When a user wants to swap Token A for Token Z, the algorithm addresses these problems by splitting a single transaction into multiple smaller transactions across different protocols, thus finding the most efficient route with minimal slippage, as shown in the diagram below.

For cross-chain functionality, Atlas plans to integrate "Wormhole" to facilitate cross-chain swaps. This is a decentralized bi-directional token bridge that allows conversion from ERC-20 to SPL and vice versa.

The underlying relationship involves value locking, packaging, and minting, while the reverse process involves burning the minted tokens to release the previously locked value. The details are shown in the image, and it is important to note that SPL is the token standard for the Solana network, similar to ERC20 on ETH and BEP20 on BSC.

Atlas DEX's white paper showcases another trading interface besides the aforementioned SWAP. We can see that this is very similar to a typical centralized exchange, making it more convenient for users to operate. To use it, one must first connect a wallet and deposit funds to place orders. However, this program has not yet been publicly displayed, and the application has not been launched, so users cannot use it for now.

Image Source: Atlas DEX White Paper

Project Background and Roadmap

The original team of Atlas DEX consists of 9 developers, some of whom reportedly have 22 years of blockchain development experience. Some team members have also previously designed and developed projects on Ethereum and Binance Smart Chain. Ahmed Salam is the founder of Atlas DEX, while other members have not been disclosed.

The project was originally named Atlas Finance and has now officially been renamed Atlas DEX. On December 23, Atlas DEX announced that it had completed a $6 million funding round led by Jump Capital.

Other participating institutions include Huobi Ventures, Genesis Block Ventures, Solidity Ventures, Genblock Capital, 3Commas Capital, Solar Eco Fund, Momentum 6, GSR, 0xVentures, Bixin Ventures, AU21, and Paramount Capital.

Atlas began development in the second quarter of 2021 and is expected to officially launch in January 2022. The team has laid out a detailed development plan for Atlas, as shown in the image above. They stated that the funding obtained will be used to accelerate the platform's expansion plans, such as further integrating leading blockchains into the platform and developing new products: NFT platforms, liquidity pools, options markets, etc.

Conclusion

The future of DeFi will undoubtedly be multi-chain and user-centric, making interoperability across various chains exceptionally important for users. As infrastructure, cross-chain DEXs are of paramount importance.

Atlas DEX has 21,500 followers on Twitter and 6,846 members in its Discord, although there is not much content. The project's greatest value lies in its ability to automatically execute transactions across multiple chains and discover the best execution solutions. It can execute trades simultaneously on multiple DEXs, reducing slippage for users at the best prices. It will provide users with aggregated liquidity, meaning it will offer liquidity from all supported DEXs.

However, Atlas will also have its own liquidity pools. The official statement indicates that traders can list new trading pairs by creating liquidity pools on Atlas, and LPs (liquidity providers) will receive trading fee rewards as well as the native governance token $ATLS.