The Mumbai-based crypto exchange WazirX, one of the biggest in India, recently announced it is developing a decentralized finance (DeFi) product in partnership with Matic Network, a blockchain scalability platform.
“We are launching an automated market maker (AMM) protocol and partnering with Matic Network to launch the protocol”, the exchange, a subsidiary of Binance, said in a blog post on Saturday.
Automated market makers are algorithmic agents that make it easier to list and exchange cryptocurrencies without the help of an order book.
AMM-based decentralized exchanges (DEXs) like Uniswap, which enable running of openly accessible, on-chain liquidity pools for different tokens, have witnessed staggering growth in trading volumes over the past few months.
“The DeFi movement has picked up globally and WazirX plans to make it easy for billions of Indians to participate in the DeFi ecosystem,” WazirX said.
The exchange, however, has opted for Matic instead of Ethereum’s network, which is currently dominating the DeFi space. “High gas costs [transaction fees] and scalability on Ethereum are definitely concerns that made us choose Matic, which offers high speed,” Nischal Shetty, CEO of WazirX, told CoinDesk in a Telegram chat.
Indeed, costs of executing transactions on Ethereum’s blockchain are up over 3,000% on a year-to-date basis. More recently, the average transaction fee rose to five-year highs above $6.
Fees are relatively low on Matic’s network. “Their Reddit proof-of-concept showed 3 million transactions at a cost of [a] mere $4 and the side chains have shown throughput of 7,200 transactions per second, which is very promising for the scale WazirX wants to achieve with its AMM-based DEX,” the exchange said in its blog post.
WazIrX, which was acquired by the global cryptocurrency exchange and blockchain ecosystem Binance last year, plans to launch the testnet of its AMM in September.
“The DeFi project is WazirX’s initiative,” said Shetty, adding that “we are glad to have support from the Binance team. It’s a huge advantage to be a part of the ecosystem.”
Trading volumes on cryptocurrency exchanges serving Indian citizens have soared since the Supreme Court lifted the Reserve Bank of India’s ban on crypto transactions in March. The weekly bitcoin peer-to-peer transaction volumes have doubled to over 300 million rupees ($4 million).