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Binance-Owned WazirX to Launch DeFi Protocol Using Matic Network

Binance-owned cryptocurrency exchange WazirX is set to delve into the decentralized finance (DeFi) ecosystem with the proposed launch of its Automated Market Maker (AMM) Protocol on the Matic Network. WazirX said in a blog post:

“We are launching an automated market maker (AMM) protocol and partnering with Matic Network to launch the protocol”.

The Decentralized Finance ecosystem has gained great traction in recent years with a lot of prospects to leap more bounds in a short time. In a bid to wedge into the DeFi and tag along, key centralized crypto exchanges such as WazirX parent company Binance has started initiating and supporting key projects in the DeFi space.

The DeFi move by WazirX will help give the exchange a headstart in India which it said is just beginning to hear about decentralized finance and aims for it to be at the forefront of this movement in Asia and around the world.

According to Siddharth Menon, Co-founder and COO, WazirX:

“The crust of DeFi is more transparency. This is a good thing for emerging markets like Crypto which brings confidence for institutional funds. We should expect huge funds coming in from institutional funds and we are just getting started. I’m confident that within the next few months, we’ll see an uptick of 6X volume in DeFi space with 5.6 Billion USD already locked. We at WazirX want to bring the future of finance today and build infrastructure for the next big thing for small and big investors”.

The life applications of Decentralized Finance include decentralized exchanges, borrowing, and lending, integration of Stablecoins, and Automated Money Maker. The Automated Money Maker comes off as one of the most innovative applications of DeFi to date.

This model of the DeFi offering has revamped the process of exchanging tokens without order book. Here, you don’t have to place a buy or sell order. Instead, AMM’s follow an algorithmic approach for trading by creating a liquidity pool to trade instead of using order books. What makes AMM’s so special is the fact that it enables a decentralized exchange of tokens!

In pursuant of a niche in Automated Money Maker service in the DeFi ecosystem, WazirX will be utilizing its token as the governance token. The exchange said in the blog post:

“WRX will play a huge role in the DeFi movement. To begin with, we’ll use WRX as a governance token of WazirX AMM Protocol. It means that the direction of WazirX AMM Protocol including decisions like feature, fees, etc. will be determined by WRX holders. We’ll share more info on WRX’s role as time progresses”.

In the DeFi space, most protocols are built on the Ethereum network but WazirX opted for the Matic Network because according to the exchange, the latter provides high-level security and decentralization while providing high scalability and throughput.

With Ethereum Network transaction fees are as high as $6 up about 3000% on a year-to-date basis, which makes running such large scale transactions being envisioned by WazirX uneconomical.

The exchange added:

“Matic offers low cost gas fees, their reddit POC showed 3 Million transactions at a cost of mere $4. The sidechains have also shown throughput of 7200 TPS which is very promising for the scale WazirX wants to achieve with its AMM based DEX”.

The Testnet for WazirX’s AMM will be launched by September.

Binance-Owned WazirX to Launch DeFi Protocol Using Matic Network

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