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Trading DEFI experience is an act of balancing.
Market manufacturers juggle cost and efficiency, while traders treat delays, shift and omnipresent reality of MEV extraction. The execution of onchain can be slow, the liquidity is often dispersed in different places and the gas costs – even on Solana – still exist.
These are just some of the problems that derive – the largest platform derived from Solana – have decided to resolve with a Swift protocol. Its new trading standard is designed to maximize the execution speed, minimize the shift and make trading really without gas on perpetuates and punctual markets.
Most onchain trades are now dispersed on AMMS, order books and private market manufacturers, leading to a sub-optimal execution. Swift Protocol consolidates these sources in a single layer of execution. Instead of waiting for confirmations, SWIFT broadcasts prescriptions to market manufacturers, who compete to fill them in milliseconds, ensuring better prices and deeper liquidity. Not too shabby.
For the SWIFT protocol to work, it needs liquidity providers to be active participants. Traditionally, Solana market manufacturers manage the quotes from order notebooks, a process that can be ineffective. The creation of the JIT market improves this by subjecting only the fillings if necessary, by reducing unnecessary gas costs. SWIFT also improves this by introducing a WebSocket -based system that simplifies the integration of market manufacturers, allowing them to react to instantly and effectively controls.
SWIFT also removes gas costs for merchants and does not impose additional costs on market manufacturers, according to Chris Heaney, co-founder of Drift and Lead on Swift Protocol. “Jit’s manufacturers are already paying gas to submit their fillings. They do not have to pay additional gas fees towards what they are currently paying, “he told Lightspeed. This minimizes unnecessary gas expenditure and ensures the effectiveness of capital. Heaney explained that one of the reasons why market manufacturers appreciate this system is “because they pay less gas by providing filling that they do not do and cancel quotes on a command book”.
The SWIFT model also addresses one of the biggest challenges in Onchain trading: MEV or maximum extractable value. In simple terms, MEV occurs when transactions are reorganized, inserted or censored in a block, to create profit opportunities for arbitration robots or validators to the detriment of traders. A common way happens is by shift. Traders have set a maximum sliding limit to ensure that their trade is still going if prices are changing, but in many systems, market manufacturers can immediately fill the trade at this limit to extract additional profits.
Swift Protocol removes this risk by using a Dutch auction system: “which means that a user cannot instantly pay for their maximum shift. It works similar to Uniswap X and other intention protocols, ”said Heaney. Instead of letting market manufacturers instantly fill an order at the worst price possible that a merchant is ready to accept, Swift forces them to compete at the best price.
As well as all this seems, I still had to report the defense of priority by orders based on the protocol – or the idea that orders could be priority depending on the quantity of governance token of the platform that a user has marked. My problem was the possibility that merchants and deep companies get an unfair advantage in terms of priority of execution. I am not a fan of ratherocratic systems.
Heaney said that there will be no prioritization based on stribe during the launch, although the team still plans to put it at best.
“The conceptions offered provide only” first overview “of the shiny market manufacturers, so that normal merchants can still fill users,” he said. He continued by explaining that “in combination with the Dutch auction, a vintage market can only fill a user if he is ready to give them a great prize.”
By collapsing the execution times, by removing gas costs for merchants and structuring orders to minimize the MEV, SWIFT offers a new interpretation of the way in which highly efficient trading can operate in DEFI. If the protocol keeps its promises, it could establish the standard for speed, decentralized and fair and fair negotiations.
The Swift protocol is now live for trading of perpetuates, with punctual markets that soon arrive.
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