Zaros, an innovative decentralized exchange (DEX), has become the inaugural EVM-compatible perpetual DEX to join the esteemed Cointelegraph Accelerator program. This groundbreaking platform enables traders to engage in perpetual futures trading, while liquidity providers have the opportunity to earn additional yield by offering liquid staking tokens (LSTs) and liquid restaking tokens (LRTs) as liquidity.
Decentralized finance (DeFi) traders often encounter various frustrating challenges. Liquidity is typically spread across multiple platforms, making it difficult to find optimal prices and trading pairs. DeFi platforms’ user interfaces can be excessively complex, deterring newcomers and unnecessarily complicating the trading process.
The delay in settlement times can also be a significant source of frustration, potentially resulting in missed profitable trading opportunities. High slippage is another issue that traders encounter, where trades are executed at different prices than anticipated, thereby reducing profits. Additionally, dealing with multiple blockchains for different assets creates a fragmented and confusing trading environment.
In an effort to address these liquidity and user experience challenges in DeFi, Zaros aims to provide extensive liquidity across various markets, including cryptocurrencies, commodities, and forex. The platform’s eClusters system and Smart Funding Algorithm effectively group assets with similar risk parameters, allowing for efficient and expeditious liquidity allocation to new markets.
To enhance user experience, Zaros employs account abstraction, which conceals the technical intricacies of blockchain interactions. The platform also supports social login and one-click trading to ensure accessibility and ease of use.
For high-frequency trading and interoperability, Zaros leverages Chainlink’s Data Streams to ensure prompt order execution, improved settlement prices, and protection against front-running. This practice involves others executing trades ahead of a trader’s orders to make a profit. Additionally, Zaros enables traders to deposit a wide range of assets as collateral into their accounts from Arbitrum and Monad, ensuring a seamless cross-margin trading experience.
In addition to enhancing the trading experience, Zaros also tackles the challenges faced by liquidity providers (LPs) in DeFi. LPs often struggle with limited staking yields, as LSTs and LRTs are typically confined to Ethereum’s staking yield.
Furthermore, DeFi yield-boosting strategies can be risky due to their complexity and the potential for significant losses in volatile markets. LPs also face the risk of liquidation, wherein sudden market downturns or collateral devaluation can force the sale of assets at a loss.
To address these challenges, Zaros offers several solutions. Seventy percent of trading fees are paid to LP vaults in Ether (ETH), enabling LPs to earn a portion of the protocol’s trading fees in addition to Ethereum’s staking yield.
The protocol also utilizes USDz, an overcollateralized stablecoin backed by LST vaults. Additionally, the platform employs an eClusters system inspired by Aave’s eMode, which efficiently distributes credit between markets while maintaining delta-neutral positions. This means that Zaros balances its positions to avoid exposure to market movements.
Furthermore, Zaros Liquidity Providing Vaults (ZLP Vaults) represent the stake of each LP in the protocol’s liquidity. These vaults are pegged to the underlying assets of the vault, such as wstETH and weETH, allowing for DeFi composability while unlocking an additional layer of yield.
Looking ahead, Zaros envisions a future where decentralized derivatives significantly penetrate both centralized finance (CeFi) and TradFi audiences within the next five years. The company believes that by prioritizing user experience, education, and delivering value with safety and credibility, this transformation can be achieved. Ultimately, this outcome will foster greater adoption and integration of DeFi in mainstream financial markets.