About

Open-source Liquidity Exchange for the Tezos blockchain ecosystem

TEZEX (Tezos Exchange) is a decentralized open-source deployment of StableTech. StableTech is a consortium of multiple entities within the Tezos ecosystem, intent on improving and expanding open-DeFi on Tezos.

Mission

TEZEX strives "To make ever more efficient the pathways to secure, scalable, and decentralized liquidity for the Tezos ecosystem."

We operate as a supportive hub within the Tezos ecosystem. Instead of aiming to replace existing Tezos exchanges, we focus on assisting their growth, offering cost-effective, low-friction avenues for expansion.

We envision TEZEX as a sort of liquidity junction or railway hub within the Tezos ecosystem. Our aim is not to supersede existing Tezos exchanges, but to bolster their growth by providing efficient and accessible liquidity mechanisms.

As an aggregator, our focus is on pooling high-volume and high-demand liquidity sources, primarily tez (XTZ), tez-like assets, stablecoins, and stable-like assets. Instead of attempting to accumulate all types of swapping pairs, we direct our resources to areas that can drive significant improvements in liquidity efficiency. Through this specialized approach, we aim to enable a thriving Tezos ecosystem.

Types of Liquidity

TEZEX focuses on facilitating two distinct, but equally critical types of liquidity. We adopt a unique approach for each, aiming to efficiently meet their respective requirements.

Inter-chain Liquidity:

This involves enabling the seamless movement of liquidity from outside the Tezos ecosystem into it, and vice versa. By doing so, we enhance the flexibility and openness of the Tezos ecosystem.

Intra-chain Liquidity:

This involves facilitating large transaction volumes of similar assets within the Tezos ecosystem. Such liquidity is vital for effective DeFi applications and commerce on Tezos.

Methods

Attaining our mission necessitates two central directives that guide our approach:

I. Boosting On-chain Liquidity Flow:

Our first directive is geared towards facilitating an increased flow of liquidity on-chain into the Tezos ecosystem. We devise and implement methods that promote this inflow, aiming to enhance the overall vitality and fluidity of the ecosystem

II. Enhancing Liquidity Swapping:

With more liquidity on-chain, our second directive is focused on ensuring its easy, scalable, secure, and decentralized swapping. This involves the development of systems and tools that guarantee smooth, secure transactions on a scale that can accommodate the dynamic needs of the Tezos ecosystem.

Strategy

TEZEX Inter-chain Atomic Swap Bridge:

TEZEX began its journey with the launch of the TEZEX Bridge, an innovative first of its kind inter-chain swap bridge created to foster decentralized asset swaps between Ethereum and Tezos. This approach enabled peer-to-peer atomic swaps and non-custodial liquidity provision through liquidity providers called ‘changemakers’ running ‘satellites’ to facilitate the swaps. The TEZEX Bridge quickly gained traction during its beta run amidst the second major surge of Tezos DeFi expansion in Q3-Q4 2021, facilitating direct interchain swaps such as ETH to ETHtz, WBTC to tzBTC, USDC to USDtz, and more.

We're now working towards the next, more advanced version of TEZEX Bridge. This production-grade bridge will broaden its capabilities to facilitate swaps to and from a greater variety of chains than just the Ethereum mainnet, inclusive of Bitcoin (via Taproot). Of specific note is the BTC to tzBTC swap; tzBTC serves as the vital instrument for enabling liquidity baking. The introduction of this swap aims to channel billions of dollars in decentralized liquidity into the Tezos ecosystem.

In addressing intra-chain needs, TEZEX is proactively interweaving key on-chain liquidity sources for optimal strategic liquidity growth. This approach involves several phases:

Liquidity Baking Dashboard:

The journey began in 2023 with the deployment of a Liquidity Baking dashboard. Liquidity Baking — a protocol-subsidized DeFi exchange pool — holds the most liquidity of any DEX contract pairing on Tezos. Its primary objective is to boost tez's (XTZ) status as a store of value. As the most substantial liquidity pool on Tezos, Liquidity Baking was our natural starting point.

Future phases will include

XTZ-CTez protocol integration:

CTez, a widely embraced surrogate or wrapped version of Tez, allows us to bypass political questions about which bakers bake the Tez deposited into DeFi protocols and how to distribute rewards. The protocol relies on 'ovens' of staked Tez, eliminating the need for direct Tez deposits within DeFi contracts. The integration of XTZ-CTez is crucial for the overall Tezos DeFi exchange ecosystem and will include all types of stablecoin integration.

Batcher Integration:

Batcher is a DEX created by Marigold to provide batched transactions of high volume pairs with low slippage. Its integration extends the reach of Liquidity Baking, supporting the broader Tezos DeFi ecosystem.

High Volume DEX pools aggregation:

We plan to aggregate stablecoin and stable-like asset pool DEX contracts from across AMMs and CFMMs in the Tezos DeFi ecosystem. By focusing on high-liquidity and high-demand assets, we aim to optimize outcomes for the thriving DeFi ecosystem.