🦴Frenchie DEX

Frenchie DEX is a decentralized and permissionless exchange for assets and tokens running directly on the Cardano ledger as a single smart contract. We operate entirely through a single smart contract to eliminate the need for third parties, providing true decentralization and ensuring a secure and transparent trading environment.

Why it stands out?

Unlike most DEXs, which often use Automated Market Makers (AMMs) and in turn has to employ third-party entity "Batchers", Frenchie DEX operates directly on the Cardano ledger as a single smart contract. This eliminates the need for intermediaries, enhancing both decentralization and security.

Even though some DEXs open source their batching process, it is still susceptible to front-running. Frenchie DEX sidesteps this issue by utilizing Cardano's innate decentralization.

What to Expect?

Frenchie DEX achieves what web2 exchanges (e.g., Binance, Coinbase) strive to accomplish, but with two key differences: decentralization and speed. While CEXs have rapid response times of 20 to 40 milliseconds for ledger updates, Frenchie DEX leverages Cardano's ledger, resulting in an average of 20-second refresh rate.

This is not a shortcoming but a reflection of Cardano's decentralized nature. As Cardano evolves, the refresh rate of Frenchie DEX improves. Hence, during high-traffic moments, some transactions may fail as multiple users attempt to claim the same order within a single block time. This challenge decreases with smaller block times, unlike the case with Web2-based exchanges.

A second key point is the reduced flexibility to introduce as many inputs compared to normal transactions. One crucial aspect to highlight is the inefficiency in IOHK's design of the Extended UTXO (eUTXO) model regarding smart contract utilization. This inefficiency becomes evident when considering the requirement to include or reference a smart contract for each input, even if multiple inputs share the same smart contract. Such a suboptimal approach impedes a fundamental advantage of the UTXO model, which is the ability to utilize numerous inputs and outputs within a single transaction. A more effective approach would involve referencing the smart contract only once, akin to how standard signing keys are referenced.

Despite these challenges, Frenchie DEX stands as a testament to innovation and forward-thinking in the blockchain space. Our commitment to prioritizing decentralization and trustlessness, while leveraging Cardano's advanced technology, not only sets us apart but also aligns us with the true ethos of DeFi. As we continue to refine and enhance our platform, we remain focused on providing our users with a secure, efficient, and user-friendly trading experience.

How it works?

Frenchie DEX is not just another DEX; it's a testament to Cardano's potential for groundbreaking innovation.

While traditional markets have long relied on order books for their superior trading efficiency, many blockchain platforms, especially those built on EVM chains, struggle to implement them due to the limitations of the account-based model. Cardano's architecture offers a compelling solution. Frenchie DEX leverages this advantage, operating through a single smart contract (SC) that mirrors a centralized exchange (CEX) functionality but on-chain, ensuring all exchanges are transparent and decentralized.

Here's how it works:

Single-Transaction Trading: At the heart of Frenchie DEX is its core SC, designed to enable direct trade/swap in a single transaction, streamlining the trading process.

Core Functions:

Order Creation: Users start by creating orders to buy or sell assets with ADA, specifying the type (buy/sell), price (Token/ADA), and quantity. This action generates a new UTXO, which is sent to the SC along with $ADA or tokens and order details stored in the UTXO's datum, effectively placing an order in the book.

Order Consumption: Users can fulfill these orders either fully or partially. A full consumption leads to a direct exchange of ADA and tokens between users. In partial consumption, the consumer receives their tokens or ADA, and the order book is updated with a new UTXO reflecting the remaining order.

Advanced Trading Dynamics: Orders can be partially consumed multiple times until they are fully completed, offering flexibility for users to withdraw their partial assets at any time. The SC supports cascading order consumption, allowing for the simultaneous processing of multiple orders, fully or partially. If a consuming order surpasses the available orders, it consumes all and creates a new order for the remaining assets.

A standout feature of Frenchie DEX is its open and transparent nature. Anyone can view orders by querying the chain about the SC's UTXOs, and directly interact with the SC and its UTXOs to execute trades without the need for an intermediary "NFT receipt validator" or batcher validation SC.

The Role of the DEX in the Frenchies Ecosystem

The DEX is more than just a trading platform; it's a vital component of the Frenchies Ecosystem. By offering the lowest fees in the Cardano ecosystem, we provide a competitive edge that benefits both creators and traders.

Furthermore, a portion of the revenue generated by the DEX is channeled back into the Frenchie community treasury. This reinvestment will be used to fund the Frenchie Creators Launchpad, The Builders Sandbox, and the Cardano marketing initiatives produced by the club. The DEX is one of the key tools in our suite of services designed to support the creators' ecosystem.