The Exchange Attempting to Bring DeFi to Bitcoin
TDEX, a non-custodial exchange that utilizes the Liquid Network, is now open for early access and aims to tap into the burgeoning peer-to-peer trading space for all Liquid assets, as per a release shared with the BTC Times.
Bringing Non-Custodial Trading to the Liquid Network
Built by development and consulting firm SevenLabs, TDEX uses atomic swaps - a specialized smart contract for transfers without counterparty risk - to instantly settle trades without an intermediary.
The system is built on top of the TSWAP protocol, which enables users to perform swaps in an automated and pseudonymous fashion.
“We take advantage of the [Bitcoin] UTXO model and the underlying capability of Elements-based networks to perform automated swaps, without the need for a trusted third party,” explained Simona Macellari, Chief Operating Officer of SevenLabs.
TDEX supports all Liquid assets as part of the “Open Alpha” launch at press time. Liquid is a sidechain-based settlement network for traders and exchanges that enables fast and confidential transactions as well as the issuance of digital assets.
The Liquid Network was brought to life by Bitcoin infrastructure firm Blockstream and is maintained by a federation of financial institutions. SevenLabs joined the federation as a member in July.
LiFi, not DeFi
By choosing to develop TDEX on top of the Liquid Network, SevenLabs opted for the novel solution over the often-utilized platform Ethereum. SevenLabs CEO Claudio Levrini is convinced of Liquid's architecture as a viable alternative to known options.
“You have the functionaries at the heart of the network that are run by well-known enterprises. These businesses have the technical expertise and clear incentives, ensuring the reliability of the network’s operation,” Levrini told the BTC Times.
Blockstream CEO Dr. Adam Back added, “Liquid is arguably as decentralized, if not more decentralized in practice than most altcoins.”
He added, “however, where things get interesting is Liquid also has stronger privacy and cryptographic fungibility—making it much harder for third parties to track amounts and asset types, or even distinguish payments from change, due to Liquid’s Confidential Transactions.”
Both the Liquid Network and TDEX projects are available open-source for the community to build upon and create their own implementations. This aspect, noted Back, positioned TDEX among the many “DeFi solutions emerging on Liquid.”
“Or, as we like to call it, LiFi,” Back signed off.