As the Cardano ecosystem grows exponentially, more and more DEXs are being launched and thus the choice for potential users becomes more difficult. With this series of articles, we will be comparing our own DEX (CardaxDEX) to other offerings that are available to users.
We aim to help users make an educated choice, with all the facts and figures, in to which DEX fits their needs best.
In this article, we take a look at the differences between CardaxDEX and Minswap.
Both Cardax and Minswap are Automated Market Maker (AMM) DEXs.
Unlike a centralised crypto exchange or an exchange in traditional finance (an order book exchange), where buyers' orders are matched with those of sellers to complete the exchange/trade, an Automated Market Maker exchange uses algorithmically managed “liquidity pools”.
The algorithm maintains the ratio of trading pairs to ensure liquidity is sufficient to allow trades to take place.
All DEXs to date built on the Cardano blockchain are written in Cardano’s native language; PlutusTx. CardaxDEX is the first DEX to only use a newer, more efficient language developed by MLabs, called Plutarch. Minswap does use Plutarch, but only for a very small percentage of their code.
By only using Plutarch, CardaxDEX, is not only much more efficient but is future-proofed for scalability and transaction throughput. Plutarch is 300% more efficient than PlutusTX (by using less memory and CPU usage).
Plutarch gives CardaxDXE the performance edge of Minswap and all other DEXs to date.
Similar to Sundae Swap’s Scoopers, Minswap sacrifices some decentralisation* by using a select group of ”batchers” to order and process transactions. This they have done this to solve the concurrency issue that is inherent on the Cardano blockchain (it is not a flaw in the design, just a problem that all Cardano-based DeFi projects must overcome).
CardaxDEX on the other hand has solved the concurrency issue in a different way. We do not use batchers/scoopers or bots to manage transactions on our DEX. We have developed the Streaming Merge algorithm.
The Streaming Merge algorithm does not rely on a third party in any way, the ordering of transactions is done by the user as a part of their order, there is no cost to the user and noone is financially incentivised. It is deterministic, in that users will know before they process their transaction that their order will go through, at the price they set and in a predetermined, fair order.
In this way, CardaxDEX maintains more pure decentralisation.
There is also a reduction in transaction costs on CardaxDEX because there is no batcher fee (currently 2ADA on Minswap).
*We are not saying that Minswap is not decentralised, rather, having a closed group of financially incentivised batchers reduces the decentralisation when compared to CardaxDEX.
The team behind CardaxDEX has also made a commitment to helping bridge the gap of entry into the Cardano ecosystem as a whole for people not yet versed in the terminology and products available. This is achieved in three ways so far:
Found on the Cardax website, the Cardax Academy is an ever-growing set of instructional materials aimed at educating everyone from complete beginners to blockchain experts. It contains articles on topics from; “How to Stake your ADA” to “the Difference Between Centralised and Decentralised DEXs”.
Project Catalyst Course
Being two-time winners of grants from Project Catalyst, it’s something we know quite a lot about. With the goal of helping potential Cardano projects succeed with their own Project Catalyst application, we put together our “free to all” course in collabaoration with the IOG team.
With literally hundreds of projects building and launching on Cardano, it’s difficult to keep up with them all. This was the thought process behind our Cardano Podcast (available on our YouTube channel). We interview new, upcoming and more well know projects in a light conversational way. Our goal is to help inform users and grow the ecosystem as a whole as we believe that only if we work together with other projects, will the Cardano ecosystem grow and flourish.
Every DEX that launches on the Cardano blockchain will have its pros and cons, our position is that:
A. We want to produce the most reliable, efficient DEX available.
B. Growing the entire ecosystem is the best way to gain some of the market share of other blockchains and thus, success for everyone in the ecosystem.