ZKX Appchain was recently introduced by ZKX Protocol – a Perp DEX platform developed on StarkNet that has raised $4.5m from many famous investment funds. ZKX team hopes that the new architecture with appchain will help the vision of bringing CEX experience to transactions in DeFi. So What is ZKX Appchain? Let’s find out in the following article.
Background of ZKX Appchain
ZKX Appchain was introduced just a few months after testnet 1 ended. Despite achieving impressive numbers in terms of the number of testnet participants, transaction volume and community development, however, Testnet phase 1 also shows a major problem that ZKX faces, which is the ability to expandability. If you have ever experienced testnet, there will be many times when orders are not executed or there is a lack of liquidity and orders are not matched.
So, with the mission “bringing the CEX experience to DeFi”, ZKX Appchain was born to not only solve the above expansion problem but also aim to bring superior UX like Web 2 to traders while still maintaining the security and transparency of Web 3.
What is ZKX Appchain?
ZKX Appchain is an omnichain layer that connects users to the ZKX exchange across L1s and rollups different, thereby helping users access a rich source of liquidity and easy transaction interactions without having to worry about switching between original chains.
Preliminary Structure of ZKX Appchain
Currently, there are not many technical documents about the detailed architecture of ZKX Appchain. From existing sources, it shows that this perps exchange will be formed from the following important parts:
- ZKX Account: The L2 self-custodial wallet will be integrated with Account Abstraction technology with many features from security and flexible login, thereby helping new users to access Web 3 transactions in a simple way.
- StarkWay: Crosschain bridge & on/off ramp native supports asset transfers between L1 & L2. StarkWay ensures easy transfer of liquidity directly to ZKX Account on StarkNet.
- ZKX Appchain: includes Orderbook (DLOB) to process traders’ transactions, node network to match orders on orderbook, block explorer where users can check all transactions on the appchain to ensure transparency, validator takes on functions such as oracle.
To better understand how ZKX Appchain works, we can refer to this appchain roadmap that interacts with L2s:
• Paired L2 accounts are shown and updated similarly on the ZKX Appchain. User assets essentially still reside at L1 and L2, ensuring users still control all of their funds. On ZKX Appchain, only data is recorded, not assets are kept.
• Transaction processing & verification is performed on ZKX Appchain via Orderbook and Substrate (supports rust).
• Calculation tasks such as PnL, Liquidation, and Funding fee are executed in Substrate and grouped into groups transferred from Appchain to L2, helping to synchronize account balances accurately.
• Validators provide quick price-feeds through an internal oracle module, helping to simplify updating trading assets, which is where current Perps Dex suffers due to limitations in Smart Contracts.
Advantages of ZKX Appchain
Some advantages of zkx appchain can be mentioned as:
Performance & Scalability – Enhanced by appchain’s superior fine-tuning and customization capabilities compared to conventional smart contracts. According to the description, ZKX Appchain has linear scalability beyond the block production time of the underlying blockchain providing instant settlement with high processing speed.
Effective risk management – The Appchain structure consists of 2 layers: the first layer is the L1 and L2 that store assets while the second layer is the custom Substrate that manages de-leveraging, liquidation and any number of transactions. Therefore, it helps improve the ability to manage fund risks during the investment process.
API integration – The new ZKX architecture provides outstanding API connectivity, thereby helping professional traders and Market Makers to easily apply trading tools and bots. From there, increasing liquidity for the exchange.
Consolidated liquidity – ZKX allows users to access the exchange seamlessly across various L1 and L2, creating a unified liquidity network. Trading on any chain creates depth for the orderbook thereby ensuring a seamless trading journey.
Transparent & Secure – Using Account Abstractions technology on ZKX account allows users to easily control their assets during transactions. In addition, users can check the above orders on ZKX Appchain publicly and transparently to avoid fraudulent transactions or under-flow.
ZKX Appchain Development Roadmap
Up to now, ZKX has launched its first product, ZKX accounts, and is in the process of a second audit with Nethermind. You can create a ZKX Account here to be able to participate in the Airdrop at the end of September.
After token list and ZKX mainnet in Q4/2023the project will gradually deploy the governance DAO and decentralize the node system through 3 rounds:
- V1 – Validator is core-team
- V2 – Validators are trusted parties (partners who have been KYC)
- V3 – Validator is open to everyone through a staking mechanism
Conclude
Hope this article helps you understand better What is ZKX Appchain? Although not too much technical information has been announced yet because the project is in the process of rushing to complete the product, in return we will soon be able to directly experience the product through testnet phase 2 to see if this is the case. Is Perp Dex likely to replace CEX in the next cycle.
