L7DEX Unleashes DeFi Potential with Data
DUBAI, UAE, Oct. 05, 2023 (GLOBE NEWSWIRE) — Smart contracts serve as the foundational technology for decentralizatio. However, they come with inherent limitations. Currently, smart contracts have limited capacity for interaction with their environment. This constraint not only hinders the growth of decentralized applications (DApps) but also impacts the user experience.
To unlock more advanced capabilities and address these limitations, DeFi can make strategic changes at the protocol level. These changes should incorporate flexible designs to cater to users’ personalized requirements within the broader framework of common features. Additionally, DeFi protocols can introduce off-chain infrastructure, such as off-chain computation and storage, to create a smoother and more user-friendly experience. As long as this data can be verified, with critical components securely on-chain, it becomes possible to significantly enhance both user experience and product efficiency.
At its core, Web3 is an innovation built upon the foundations of Web2, and harnessing this potential is essential for industry development. Some DApps are beginning to draw inspiration from successful Web2 models, seeking innovation in DeFi through data and computation. In this article, Let’s explore how L7DEX, a decentralized derivative platform, leverages data and computation to realize DeFi’s untapped potential.
L7DEX is a decentralized perpetual contract trading platform offering spot trading, perpetual trading, and liquidity + IEO. These products embody the core DeFi concepts: trading and leverage, generating huge valuable on-chain data. This data fulfills the blockchain ledger’s mission, ensuring the ownership of user assets. This also serves as a critical driver of DeFi innovation. In this article, Let’s dissect how L7DEX leverages data and computation to achieve value innovation in DeFi and unlock its potential.
I. Personalized User Experience
Smart contracts, due to its inherent limitations, cannot deliver personalized user experiences. This lack of differentiation hinders DApps from acquiring users as precisely as traditional apps. However, DApps can adapt and offer personalized experiences by designing flexible protocols and interactions.
L7DEX introduces NFTs as a user rating system, factoring user risk into interest rates and collateral factors. This approach provides users with personalized experiences while effectively mitigating platform risk. Users holding higher-grade NFTs can access higher collateral interest rates and reduced trading fees, similar to traditional financial institutions offering preferential credit terms or higher interest rates to high-quality clients. Empowering users with choice and providing diverse incentive schemes for those choices are essential components of this approach.
Another innovative approach of L7DEX involves assessing a user’s wallet address’s historical interaction records as a means of credit rating. This system offers implicit incentives, allowing early and active users to gain different identities and receive varying rewards, such as points and platform token incentives, based on both on-chain and off-chain data records.
II. Protocol Economics
Interpreting and computing data can enhance DeFi’s protocol economics and token economic models, creating more user-friendly and platform-friendly shared incentive schemes.
In L7DEX, the value and motivation derived from user behavioral data manifest in different income-generation channels. For users seeking stable income with high loyalty and engagement, L7DEX offers a node plan. This plan allocates transaction fees to eligible node users based on their share, with different node levels receiving varying proportions of slippage income.
Users leaning towards DeFi 2.0 mining and IEOs receive different levels of mining incentives and IEO admission thresholds based on their on-chain interaction history, activity levels, and commitment.
In complex computing areas, L7DEX optimizes allocation through protocol economics. This includes estimating the returns and risks of underlying protocols, identifying optimal allocations through revenue aggregators, pinpointing higher-quality IEO investment targets through standard target portfolios, and establishing efficient liquidity treasuries, market-making logic, and contract clearing treasuries to optimize protocol revenue distribution between the platform and users
By interpreting data and implementing changes at the protocol level, L7DEX directly incentivizes a large number of early users, boosting user loyalty and providing further incentives to existing users, thereby increasing the potential for differentiation and cohesion among users.
III. Qualified Access and Access Restrictions
While blockchain’s fundamental feature is permissionless access, practical applications need some degree of control. Fully open application layers are susceptible to various attacks, jeopardizing user asset security and platform development.
To address these concerns, in addition to introducing various review systems, L7DEX has some innovation on the access side. Firstly, robot admission restrictions are implemented to counteract various robot attacks, such as front-running, manipulation of prices, and control of prices. These restrictions aim to limit robot interactions based on data, as identifying and controlling robots remains a challenge for many real DEX users. Secondly, standardized and compliant contract mechanisms are introduced to minimize application layer risks from a technical standpoint, thus optimizing the trading environment.
The implementation and application of advanced computational capabilities and data-driven strategies have the potential to promote further innovation in the DeFi system. This approach can prevent the industry from stagnating and encourage effective innovation. Analyzing L7DEX, it is clear that data-driven strategies have immense potential for enhancing operability and improving user experiences. With the assistance of AI, these potentials may be further unleashed.
As the industry continues to evolve, DeFi protocols must make more user-friendly changes. They should prioritize transparency and trustlessness while considering user habits and experiences. Establishing a sustainable DeFi future driven by users, for users, could potentially transform the global financial landscape.
CONTACT: Lucas wang L7 Labs bd at l7dex.finanace
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