Dubai, UAE, 15th December 2023, The Kinetex team would like to talk more about Kinetex’s first solution – Liquidity Aggregation – as the launch of Flash Trade approaches. This solution was created to address the challenges faced in DeFi, especially when exchanging assets across different blockchains.
DeFi poses a significant liquidity challenge because liquidity is spread across multiple pools that cannot be accessed simultaneously. Finding enough liquidity, sometimes even for small transactions, can take a lot of time and effort. Moreover, each pool has different prices, and when combined with high volatility, it can lead to losses during multi-part swaps. Therefore, the need for a universal and user-friendly solution for cross-chain asset swaps in DeFi is as evident as ever. Its absence causes several problems, including unfavorable swap rates and increased price slippage, which may discourage users from participating in the market.
Kinetex Advantages
Kinetex offers a solution for users to find liquidity quickly and easily, addressing common concerns. The platform has a simplified and user-friendly interface that ensures accessibility for users with varying levels of experience. This way, Kinetex helps to make DeFi more inclusive and user-friendly.
Kinetex has introduced two unique features that simplify crypto transactions for users; both are made possible through relay nodes. They calculate gas costs and manage user transactions automatically, including assisting with gas payments. As a result, users do not need to worry about native coins or stay online throughout the execution of transactions. With these features, Kinetex makes crypto transactions genuinely easy and painless.
Kinetex’s approach to ensuring adequate liquidity is another key characteristic that sets it apart from other solutions on the market. The team has worked towards creating “infinite liquidity” by aggregating hundreds of liquidity sources, including bridges, DEX aggregators, and protocols. Such an approach allows Kinetex to construct beneficial swap routes at any time of the day or night rather than attempting to generate new liquidity within the platform.
Kinetex, as a meta multi-chain aggregator, can avoid deteriorating liquidity conditions across chains by choosing not to create new wrapped tokens. Wrapping leads to fragmented liquidity and frozen liquidity. The first phenomenon occurs when one asset is wrapped on multiple networks, causing liquidity to be divided between those networks. Apart from that, wrapped tokens also have significant security risks as they often become targets of hackers. Thus, minimizing work with wrapped tokens makes Kinetex more secure and contributes to a healthier liquidity environment.
The last advantage is algorithms, which Kinetex has integrated to automatically explore and analyze all liquidity sources and create the most cost-effective and time-efficient routes. As a result, Kinetex enables its users to swap numerous crypto assets profitably without the hassle of manually searching and comparing different platforms.
Liquidity Sources
Kinetex aggregates hundreds of sources of liquidity, including DEX aggregators, protocols, market makers’ liquidity, etc. It creates an extensive liquidity ecosystem, enabling users to find various swap options in one place. The team works to integrate more liquidity sources based on community requirements.
Conclusion
Liquidity Aggregation mode enables access to a large number of liquidity sources through a single user-friendly interface, greatly enhanced by automation and gasless flow. This mode allowed Kinetex to improve trading efficiency and reduce the time and costs needed for trading crypto, particularly cross-chain. Stay tuned for more in-depth posts regarding this mode in the following weeks.
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