Exploration of a New Decentralization Derivatives Trading Exchange: MUFEX

If a decentralized contract exchange can implement Google account login, its audience will significantly expand. If it can maintain the user experience of centralized exchanges while ensuring that users have complete control over their assets, then during a trust crisis in traditional exchanges, such platforms will undoubtedly attract a large number of users.

MUFEX (Most User Friendly EXchange), as an emerging Decentralization derivatives trading exchange, is committed to achieving the above goals. Its design integrates the advantages of multiple existing platforms, aiming to create a trading environment that is both secure and convenient.

The core mechanism of MUFEX

1. Adopting an asset self-custody model similar to that of a well-known decentralized exchange, users can forcibly withdraw funds at any time.
2. Introduce Account Abstraction (AA) wallet solutions, supporting more convenient user authentication methods such as Google login.
3. Hybrid order book system: Combines the liquidity provided by passive market makers and the participation of traditional market makers.

These mechanisms bring the following advantages to MUFEX:

Asset Self-Custody

After a well-known centralized exchange experienced a crisis, user trust in the exchange significantly declined. The asset self-custody model can effectively solve this problem, allowing users to have complete control over their funds. Although the degree of decentralization in trading matching is also important, asset security is even more critical in comparison.

Account Abstraction Wallet Solution

A well-known decentralized perpetual contract trading platform has experienced rapid growth over the past year, but its user growth has now stabilized, with approximately 2,000 daily active users, of which only around 1,000 are contract trading users. Considering the scale of active users in the entire cryptocurrency market, this achievement is quite impressive.

MUFEX further lowers the usage threshold by introducing account abstraction wallets. This allows users to log in using their email or Google accounts, just like traditional Internet products, greatly simplifying the operational process and is expected to attract more users.

Hybrid Order Book System

MUFEX's order book system combines the model of passive market makers providing liquidity and traditional market makers participating. For the passive market maker part, MUFEX adopts a mechanism similar to a dynamic slippage protocol, allocating liquidity based on external spot data. At the same time, because MUFEX adopts the model of on-chain asset self-custody and off-chain transaction matching, it also supports traditional market makers providing liquidity through APIs.

The advantage of this hybrid model lies in the fact that passive market makers can provide basic liquidity, while the participation of traditional market makers can further enhance liquidity depth and the upper limits of trading volume, helping to overcome the development bottlenecks of traditional decentralized exchanges.

summary

The design goal of MUFEX is to combine the advantages of the following aspects:

1. The asset security of decentralized exchanges
2. User Experience of Centralized Exchanges
3. The low slippage characteristics of certain well-known Decentralization protocols
4. The composability of liquidity tokens
5. The scale potential of traditional order book systems

However, whether MUFEX can truly achieve these goals still needs to be validated through market practice. Especially in terms of operational capabilities, this poses a significant challenge for current decentralized finance projects.

Industry Trend Analysis

The decentralized finance sector is evolving towards enhancing user experience. Although perpetual contracts were initially developed by small teams, later large centralized exchanges successfully captured a significant market share by optimizing operations and user experience.

For contract trading users, frequent operations make user experience especially important. Although investing significant resources to improve user experience may not be cost-effective in most decentralized finance areas, the derivatives market is an exception. MUFEX's attempts may open a new direction for development, and it is worth paying attention to the subsequent performance of various forces in the industry.