Current decentralized exchanges (DEXs) face challenges like unexpected slippage and Miner Extractable Value (MEV) attacks. To address these issues, Bancor has introduced Carbon DeFi on Sei v2, a DEX featuring advanced capabilities such as zero slippage, MEV attack resistance, and versatile order types.

Decentralized finance (DeFi) has significantly advanced financial autonomy, yet it still encounters several inefficiencies. Traders often experience frustrations with DEXs, which can feel like navigating an outdated marketplace.

Imagine buying concert tickets without a clear price, dealing with disappearing offers, and facing hidden fees that eat into your profits. This is the reality for many DeFi traders today. Key issues contributing to these frustrations include:

• Lack of On-the-Fly Adjustments: Many DEXs lock traders into their initial decisions, making it difficult to respond to rapid market changes.
• Vanishing Limits: Limit orders can be automatically nullified when markets retrace, leaving traders without their desired trades.
• Surprise Slippage: Unpredictable slippage can significantly increase trading costs, similar to agreeing on a price for a pizza but ending up paying for a full meal.
• MEV Sandwich Attacks: Malicious actors exploit transaction mechanics to secure profits at others’ expense, akin to someone cutting in line and taking your fries.

These limitations underscore the need for more advanced trading solutions in the DeFi ecosystem. Orderbook-like DEXs aim to combine the control and accessibility of centralized exchanges with DeFi’s transparency and decentralization.

Addressing Common Challenges in DeFi Trading

The launch of Carbon DeFi on Sei v2, an orderbook-like DEX from Bancor, aims to resolve traditional DEX issues with a flexible intent-based system. Sei, a layer-1 blockchain, is designed to optimize trading and enhance the DeFi user experience.

Sei v2 further improves these capabilities with speed, security, and scalability, making it an ideal environment for innovative DeFi solutions like Carbon DeFi.

Sei v2 provides a robust foundation for Carbon DeFi’s features, including:

• Zero Slippage: Carbon DeFi ensures traders get the exact price they expect without unexpected cost increases.
• MEV Sandwich Attack Resistance: The platform protects traders from manipulative tactics exploiting transaction timing.
• Versatile Order Types: Carbon DeFi offers on-chain limit orders, range orders, and automated recurring orders, enabling continuous buy low, sell high strategies similar to grid trading or a trading bot.
• Concentrated Liquidity 2.0: With custom fee tiers, no tick constraints, auto-compounding fees, and dynamic position adjustments without the need for withdrawal and redeposit, this feature saves users time and gas fees, enhancing capital efficiency.

Users can adjust orders and customize fee tiers on Carbon DeFi. Source: Carbon DeFi

These capabilities are enabled by Bancor’s latest innovations, Asymmetric Liquidity and Adjustable Bonding Curves, which underpin this trading platform.

Unlike traditional liquidity pools requiring equal-value deposits of two assets, asymmetric liquidity allows users to provide liquidity with varying amounts of each asset. This flexibility enables token projects, whether DeFi blue chips or memecoins, to bootstrap liquidity using only their token.

Adjustable Bonding Curves facilitate custom price adjustments, allowing for more efficient price discovery and better alignment with market conditions.

Expanding DeFi Trading Across Blockchain Ecosystems

Bancor has been a leader in DeFi innovation, launching one of the first automated market makers (AMMs) in 2017 and introducing concentrated liquidity in 2020. With Carbon DeFi, Bancor aims to revolutionize DeFi by bringing asymmetric liquidity and an orderbook-like DEX with a built-in solver system and chain-wide arbitrage to the forefront.

Various order types are included in the Carbon DeFi application. Source: Carbon DeFi

In addition to Sei v2, the arbitrage framework and smart contracts powering Carbon DeFi are deployed on multiple Ethereum Virtual Machine (EVM) chains, including Ethereum, Base, Fantom, Mantle, Blast, and Linea. Looking ahead, Bancor plans to further develop this technology and expand its reach across promising blockchain ecosystems. The goal is to mainstream DeFi trading with powerful and user-friendly models.

By addressing key issues in decentralized trading, Carbon DeFi aims to create a seamless, efficient, and secure trading platform free from third-party dependencies such as oracles and keepers. Its deployment on Sei v2 signals a shift in DeFi engagement, potentially setting new standards for innovation and accessibility in the industry. This advancement could drive broader crypto adoption and catalyze further innovations in DeFi, enhancing its impact on the global financial ecosystem.

Source: Cointelegraph