Solana L2 DEX can compete with centralized exchange experience.
Key receivers
Zeta Markets is developing the Solana L2 blockchain to boost DX performance with faster trading and higher success rates. The proposed L2 solution aims to achieve 3-5ms confirmations and 10,000 TPS by comparing centralized exchange capabilities.
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Solana (SOL) currently has $8.3 billion in on-chain derivatives monthly trading volume in August. Zeta Markets is the third decentralized exchange for Perpetual Trading (PerpDX) in the Solana ecosystem, recording $24 million weekly.
The team behind Zeta is creating Zeta X, a Solana-based layer-2 (L2) blockchain with the specific goal of becoming a perp DEX. According to Tristan Freeza, founder of Zeta, Solana L2 can support fast transactions and high success rates for transactions.
“An output exchange built entirely on Solana L1 still faces a number of challenges, such as latency, which is the time it takes to enter a command into the exchange and the time it takes to transmit the results to the user,” Frieza explained. A brief description of Crypto.
He added that congestion is a challenge for L1 Perp DEXes as users face higher gas fees, longer confirmation times and lower transaction success rates.
A third major challenge is liquidity. Payments.
Thus, Frieza stated that L2 blockchain is needed to solve these issues.
Benefits are in metrics.
According to Zeta's founder, Zeta's move to L2 can increase the smoothness of transaction confirmations, which can happen in 3 to 5 milliseconds. This restriction is similar to central exchanges, he added.
Other benefits include a maximum of 10,000 transactions per second (TPS), a seamless 1-click user experience without the need to sign multiple transactions and confirmations, and zero failed transactions and triggers, even when the Solana mainnet is congested.
Liquid separation
A common issue facing the decentralized finance (DeFi) ecosystem today is liquidity fragmentation. As more L2s are created, liquidity flows differently, affecting the user's trades.
Solana credits the community with focusing mostly on application development, as the network's flow is sufficient to handle current user demand. Therefore, the formation of L2 can initiate a fluid partitioning issue in the ecosystem.
“In contrast to this anxiety, we've had a lot of excitement from users, protocol teams and individuals at the Solana Foundation looking forward to deploying L2 in anticipation of specific use cases that require extreme caution,” Frieza said.
The reason, he added, is that Zeta Group aims to create a high-performance decentralized financial system, not just L2 for valuation or Total Value Locked (TVL).
“Furthermore, some applications (perps exchanges included) don't benefit from these liquidity benefits because different origin exchanges have different delivery systems and are at the spatial layer, which are not necessarily compatible,” Frieza said.
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