What is DEX 2.0?

Capital markets typically consist of two types of participants, entrepreneurs and investors. Investors are further divided into three categories, speculators, value investors and institutional investors. Existing DEXs currently operating in the markets mainly focus on only the speculators. Such focus may be good for creating excitement quickly, but it is difficult to generate lasting value and sustainable growth in an ecosystem, particularly when investors must be wary of the number of scammers operating in markets.

Despite the concentration of the speculators, the number of value investors among those first-generation DEXs is steadily increasing. Although there is a clear need for early-stage investors to utilize the DEXs as the means to get early exposure to crypto projects, rampant rug-pulls and scams result in limited use of the DEXs. The current DEXs are only good for the basic function of connecting investors with companies seeking investment. Due to the decentralized nature of the Defi market, only a handful of genuine, high-quality projects stand to receive funding from the crypto market, creating an unnecessarily high barrier for projects seeking investment.

The market for the second generation of DEXs is expected to undergo many qualitative changes. First, it will play a more active role in the financing market. These DEXs will be the first to provide technical support to token issuance and distribution for projects. To create a more trustworthy environment for investors, second-generation DEXs will also perform basic primary verification for whitelist due diligence. The new-generation DEXs will also have important roles supporting the general public and DAO organizations in raising funds from investment companies.

The growth of the DEX market will also bring about many changes in supporting investor trading. Trading options outside of instant swaps are limited, but more advanced trading options will be developed to be made available for investors. These advanced trading options will likely encompass automatic profit-taking and stop-loss functions, making investment activities more effective. In addition, it will lead to investors achieving higher returns through products that can offer high-quality price prediction models and asset management functions.

Second-generation DEXs will support the trading of derivatives such as futures and options, enabling various investment activities. Various hedging transactions such as insurance contracts will gradually be introduced as viable products. This new type of DEX, which will function as a comprehensive asset management protocol, has a conceivable chance to eventually become the biggest financial market mankind had ever witnessed.

Stackswap seeks to create balanced attention for all participants and stakeholders. By supporting early-stage entrepreneurs, non-profit organizations, and value investors in addition to speculators, we aim to create a positive feedback loop to increase the value of our platform over the long run. With the offline accelerators and funds, such as the Stacks Accelerator fund, and co-working space providers coupled with our online DEX and launchpad, it is possible to create such a feedback loop.

As a bonus, Stackswap will also introduce advanced trading functionalities to create better investor support, ranging from essential tools such as profit-taking and stop-loss orders to state-of-the-art Artificial Intelligence-based market forecast, which had already been tested by various beta users. Leveraging the years of research experience of Ph. D.s in the founding team, a price prediction model through an advanced AI model will be introduced to help the investors navigate the rough waters of the volatile Defi market. The liquidity of the derivatives market, where centralized exchanges (CEX) are still the mainstay, is also expected to gradually shift to DEXs in the future. With that in mind, we are planning service expansion with the goal of a DEX protocol that can support high-throughput derivative transactions and smooth order book sharing with CEX.

The Stackswap Launchpad function has been developed to support attracting investment activities. Any team that would like to build a project on the Stacks protocol can issue tokens through the Stackswap Launchpad and kickstart PoXL mining and listing on the spot market to quickly bootstrap their project. Projects that have issued tokens through the Launchpad are automatically submitted for consideration to our offline partner accelerators and funds. It is the industry’s first fast-track in which an on-chain launch and offline funding are linked, as it can be used to attract actual investment from the offline funds, including the Stacks Foundation, upon approval and progression through their review process. Stackswap will play a key role in providing rapid support for DApp incubation and expanding the Stacks, and Bitcoin ecosystem through a fast and powerful Launchpad.



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