The post Solana L2 DEX could rival centralized exchange experience appeared on BitcoinEthereumNews.com.

Key Takeaways Zeta Markets is developing a Solana L2 blockchain to enhance DEX performance with faster trades and higher success rates. The proposed L2 solution aims to achieve 3-5ms confirmations and 10,000 TPS, rivaling centralized exchange capabilities. Solana (SOL) currently shows $8.3 billion in on-chain derivatives monthly trading volume so far in August, which is an 8.7% dominance, according to DefiLlama’s data. Zeta Markets is the third largest decentralized exchange for perpetual trading (Perp DEX) in Solana’s ecosystem, registering $24 million in weekly volume. The team behind Zeta is aiming at the creation of Zeta X, a layer-2 (L2) blockchain based on Solana with the specific purpose of being a Perp DEX. According to Tristan Frizza, founder of Zeta, a Solana L2 will be able to support faster trading and a higher success rate for transactions.  “A derivatives exchange built completely on the Solana L1 still faces several challenges such as latency, which is the time it takes for an order to be submitted to the exchange plus the time taken for the result to be communicated to the user,” Frizza explained to Crypto Briefing. He also adds that congestion is also a challenge for L1 Perp DEXes, as users face elevated gas fees, longer confirmation times, and reduced transaction success rates.  The third major challenge is liquidity provision since market makers tasked with providing liquidity encounter several obstacles that hinder efficient quoting, such as non-deterministic order placement and cancellations when transactions take 20 to 30 seconds to confirm in periods of congestion, on top of high gas fees. Thus, Frizza stated that an L2 blockchain is needed to address these issues. Benefits are in metrics According to Zeta’s founder, the migration of Zeta to an L2 could boost transactions’ soft confirmations, which can happen within 3 to 5 milliseconds.…

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Filed under: News - @ August 14, 2024 5:24 pm