What is Catalyst Exchange? Catalyst Exchange is a Cross-Chain Dex AMM, supporting cross-chain asset trading for all EVM Chains, non-EVMs or any consensus mechanism. The vision of the project development team is to make Catalyst the accounting layer for the future of modular architecture in blockchain architecture.
So what is Catalyst Exchange? How does it work? Let’s find out in this article!
To understand more about Cross-Chain Bridge, you can read the following articles:
- What is LayerZero? LayerZero Cryptocurrency Overview
- LayerZero’s Working Mechanism
- What is Wormhole? Wormhole Cryptocurrency Overview
- What is Stargate Finance (STG)? Stargate Cryptocurrency Overview
What is Catalyst Exchange?
Overview of Catalyst Exchange
Catalyst Exchange is a Cross-Chain Dex AMM, supporting cross-chain asset trading for all EVM Chains, non-EVMs or any consensus mechanism. The vision of the project development team is to make Catalyst the accounting layer for the future of modular architecture in blockchain architecture.
Catalyst’s goal is to create an interconnected ecosystem where users can easily access assets and applications across multiple chains. Additionally, developers launching new blockchains can easily connect them to existing networks and their respective users.
Catalyst will provide developers with a set of tools, APIs, and documentation to simplify the process of connecting to the broader Catalyst protocol. These resources help developers quickly connect their projects to other networks and take advantage of Catalyst’s liquidity.
Mechanism of action
Catalyst is a cross-chain automated market maker that only requires an interoperable messaging layer to operate. This allows for easy-to-use, secure, and fast cross-chain swaps. Catalyst is lightweight and scalable enough to exist on any chain, regardless of virtual machine, consensus mechanism.
Catalyst uses a concept called a “liquidity unit”: an abstract value that can be easily transferred between chains to allow anyone to understand between any Catalyst smart contract on any chain. Therefore, any chain that integrates Catalyst can automatically move values to or from any other chain that supports Catalyst.
Catalyst uses a one-sided pool for each asset per chain. There is no fragmented liquidity from the central Executor chain or forked liquidity to provide intermediary bridge tokens. And Catalyst UI will integrate best-in-class forwarders for gas funding, rules-based transaction logic, multi-call transactions.
Catalyst LPs will receive MEV collected by the protocol as sustainable profits in addition to pool fees. Protocol wants to reward LPs for putting capital into the market to take on risks such as temporary losses. This design has fundamental economic advantages as it absorbs MEV and redistributes it to LPs, making it a better platform for providing liquidity compared to other DEXs.
The process of a transaction performed on Catalyst is as follows:
- Users deposit assets into Catalyst in the parent chain.
- Catalyst calculates liquidity units from deposits.
- Messages containing liquidity units are sent from the origin chain to the destination chain, leveraging an interoperable protocol and its relay ecosystem such as IBC.
- Catalyst on the target chain receives the cross-chain message and calculates the amount of assets to withdraw from the vault and send it to the user.
- Users receive assets on their designated wallet.
- Liquidity providers who have contributed to the pool used in trading will earn fees.
Development Roadmap
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Core Team
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Investors
April 26, 20236: Seed round successfully raised $4.2M led by The Spartan Group and with participation from other funds such as HashKey Capital, Circle, Alchemy, Robot Ventures, Maven 11 Capital, Superscrypt, Skip Protocol.
Tokenomics
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Exchanges
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Catalyst Exchange Information Channel
- Website: https://catalyst.exchange/
- Twitter: https://twitter.com/CatalystAMM
- Medium:
Summary
Catalyst Exchange supports cross-chain transactions using AMM mechanism through message transfer protocols. Although this model is feasible and does not cost much for multiple Swaps. But another problem that Catalyst or other AMM Dex faces is liquidity. If the liquidity on Catalyst is deep enough, the project will be successful, otherwise it will not be competitive with other Dex Cross chains.
So I have clarified what Catalyst Exchange is? Catalyst Exchange cryptocurrency overview. Hope this article provides you with a lot of useful knowledge!