Native: Why should your user fees go to Uniswap?

Recently, BlockBeats NEXT live broadcast invited Native co-founder Meina, Nomad Capital partner Ricky, and well-known KOL xiaoyufu to discuss how to build their own DEX and the future development and prospects of the track under the theme of "Native: Why Your User Fees Should Go to Uniswap".

BlockBeats: Welcome everyone to the BlockBeats NEXT live series. First, please allow our guests to introduce themselves. Meina, please go first.

Meina: Thank you, host. I am Meina from Native Creatives. Many people may know me from my personal channel account Cryptomana. I have been doing interviews and conversations in the Web3 field, and have had exchanges with different project parties, investors, and KOLs. Therefore, my personal background belongs to technology, media, and marketing. In terms of technology, I have 7 years of Data Science background and have managed many technical teams. At the end of 2021, I entered the Web3 field and started to help project parties with business expansion, marketing, and so on. In November last year, I joined Native. Today, I am very happy to meet everyone in the BlockBeats Next live room.

Ricky: Hello everyone, I am Ricky, a partner at Nomad Capital. I have a background in computer science and have been working in the computer and finance industries for a long time, mostly focusing on quantitative trading and financial investments. Recently, Nomad Capital has also launched a Venture Fund, which focuses on investing in some examples of Web3 applications. Thank you Mana for coming up with such a great idea for the Native project, and thank you for the invitation from BlockBeats.

Xiaoyufu: Hello everyone, I am Xiaoyufu. Thank you for inviting me to speak. I started my career in community building and later moved into finance-related work as my audience grew. I have also been involved in some web3 startups. Currently, I am working on Aptos Eden, a project supported by Aptos, which is the first project in Asia to receive official investment.

BlockBeats: Okay, so today's topic is still centered around Native. Meina, could you please introduce Native first?

Meina: Okay. Actually, Native is like what you just mentioned. In the field of encryption, we call it an invisible Dex layer, which is the layer of decentralized trading platform, that is, the infrastructure of decentralized trading. We want to turn the trading function into a product function without creating an independent decentralized trading platform. The purpose of Native is to allow different project parties to create their own decentralized trading platform through our infrastructure in a short time. We present the entire function in the form of an API, allowing project parties to create DEX very quickly, and we also provide great flexibility. Project parties can choose their own pricing model, whether it is from popular automatic pricing models such as Uniswap V2, V3... or professional market maker pricing models. Therefore, users can enjoy the experience of decentralized trading, but they can also enjoy some professional or centralized trading platform capital efficiency.

Actually, the most important thing for the project party is that they don't need to pay Native or any decentralized or centralized trading platform anymore. They can collect 100% of the transaction fees they deserve. For many project parties with large trading volumes, this is an "extra" source of income, and they can use this source of income to do more product development or feedback to users.

Project parties do not need relevant professional knowledge, or do not need to build this infrastructure step by step themselves, they can use it directly. Recently, Cointelegraph also wrote an article about Native, comparing us to Shopify for DEXs, similar to our one-stop decentralized financial trading platform service.

BlockBeats: Meina, can you introduce how to use Native from the perspective of product logic and user workflow?

Meina: Okay, no problem. I will create a demo for everyone to showcase. Currently, we support Ethereum and BNB Chain, and we will support more projects in the future.

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BlockBeats: When it comes to the pricing model of Native, which is also the most interesting part for users, can you explain in detail the pricing model of Native to users?

Meina: Next, you can choose different pricing models, which is what I mentioned at the beginning. We provide flexibility. For Native, we noticed that different project parties have different needs for pricing models even in different stages of their growth, even in the state of issuing tokens.

If the market is particularly volatile, a pricing model may be needed. If the market is in a different situation, a different pricing model may be needed. Therefore, we will provide different pricing models for you to choose from, and you can make changes quickly and in real-time. You can even create different pricing models.

You can create several pools, which are different pricing models. So we Native have created a broughter, and ultimately your users can get the best price with the lowest slippage from all pricing models. Users can also set their own liquidity provider fee. Native will not be sharing any of this fee with the project party, and users can set it to 0.

In this trading competition, many KOLs or communities actually set the transaction fee to 0 because it needs to be feedback to the entire community. Therefore, it ultimately depends on whether the project party wants to provide users with a better experience or not. They may not want to charge them a lot of money or charge a certain percentage of transaction fees lower than the market.

However, the project party can decide how to spend this money, whether it is used to optimize the product or to provide feedback to users. Native provides a great deal of freedom to the project party and the community.

In the concept of Web 3, the community can decide how the project party should proceed, including the larger project parties we have recently encountered. After they have issued tokens, if they want to use Native, we can see that their users are actually deeply involved and understand Native. You can decide how much each transaction or daily limit is. If it exceeds the allowed limit, the transaction fee will be incurred and will only be used when it happens on the chain, and then it will use the money in your wallet. Therefore, Native truly separates the functions of asset custody and trading.

I think one of the reasons why many centralized trading platforms had problems in the past is because they did not separate these two functions. I think this is also a problem that has not been paid enough attention to in the Web 3 industry, so Native hopes to bring a change to the industry. I think many users may think that we were fine before. But the many centralized trading platform explosions that occurred last year did give us a big lesson. I think when a community or a project uses our Native, they can also have better security.

Ricky: I think the new version of the product is quite good, and the iteration of the version is very fast. From the surface, it seems to be a project that returns transaction fees to users. However, from a more macro perspective, it actually brings the project party and the community closer together.

In the past, the project party and the user party were on opposite sides. After the token was issued by the token issuer, it represented a technological innovation and new ideas and products. Many users were interested in using it, either by using the token or trading it. However, they needed to go through many intermediaries, including centralized and decentralized trading platforms, various financing and token issuance platforms, and OTC brokers. Their main role is to provide a place for the token issuer and interested individuals and institutions to easily buy, sell, and exchange the token for investment purposes. This intermediary side has created a huge industry.

However, the value capture of this part has always been occupied by intermediary institutions. Since the issuing party and the user party want to have direct interaction, whether it is buying and selling or investing, why don't we create a functional infrastructure that allows both sides to communicate directly and expand the value capture of this middle part? Native project was born to directly transfer the value capture to the project party and users, which is its greatest value in my opinion.

I think this is truly an intermediary layer in the industry, which can promote user usage and understanding of the industry, and can also free everyone from relying on intermediaries. You no longer need to open an account with a trading platform, find an OTC DEX, or deposit your coins into a pool on Uniswap. You can keep your coins in your own wallet and interact with your favorite projects. I think this achieves an important goal, which is the original intention of Web 3? The original intention should be ownership.

This is also why I said that I, as a Native, have done some very important things, which is to bring in liquidity. There are many good liquidity providers that bring together issuers, retail or institutional buyers and sellers. These three together actually form the three most important aspects of centralized trading platforms in traditional finance and including decentralized trading platforms. These three parties have been able to form a complete and micro market that can achieve great value and price discovery.

We are allergic to the idea of speculating on meme coins. As someone with a technical background, I believe that the purpose of technology is either to innovate or to improve efficiency. I think that Native is definitely a great place to improve efficiency. The project team can issue coins and find liquidity, both of which can be done on the same platform in just a few minutes. In the past, it would take a lot of time to discuss listing on a trading platform.

The second thing is, for retail investors, if you want to trade, you need to select a platform. You can trade on the platform you like for the currency you prefer. This should be a more direct approach.

Xiaoyufu: I just agreed with Ricky on one point he made, which is to closely connect the community and users. In fact, it's like buying and selling things in the past, which may have been channel-based in the 1990s. Someone controlled the traffic, someone controlled the so-called sales channels, and so on, controlling everything.

And now everything is being returned to the project party, to the most basic people in this process, the project party, users, and community. This is a point that I strongly agree with. From my perspective, for example, in decentralized trading platforms, something that we care about very much is who can provide very convenient or high-quality services for users.

Native, everyone can trade platform from this perspective can effectively bring together some users.

Just like when we play DingTalk, from a certain perspective, the first step is to distribute traffic, which must be from the project party to the community, and then to the users. In this process, both the project party and the community can provide and obtain great convenience, which can quickly influence the market or radiate to users from a certain perspective. This is what I think is a bright spot of Native.

In addition, now we are in the Web 3 stage, which is a phase of heavy wallets and light platforms. Native has its own pricing mechanism, providing choices for project parties. What is its ultimate goal? To provide users with better prices and lower slippage, which is what users care about most. Now there are so many decentralized trading platforms, I can trade anywhere, but the key is how can I pay less transaction fees and get a better experience? This is a feature of Native.

Moreover, many people have not yet accepted or used the logic of "everyone can open a trading platform". When I first tried it, I also provided a 0 handling fee. For the community, they can set it to 0 or slightly lower than the market. Then, they can use this money to better integrate the project party and users.

For example, if he uses the transaction fee for a donation, then this money has other uses. If he loves a community or other valuable project, as long as he loves the project, he can use this money to help build the project. This is my understanding of Native.

Additionally, if he solves the aforementioned channel or qualification issues, he can put pressure on the project party. However, once these issues are resolved, the project party may have more money and energy to give more rebates to users during the development process. This is a very good stage.

Ricky: Regarding the memory capacity model, Native just mentioned it, which may be the most interesting part for users.

Because I have been involved in pricing in the encryption industry, whether in traditional finance or in large trading platforms, I think the most important thing about pricing is actually who can bear the risk. In traditional finance, including now large centralized trading platforms, most merchants have a very complete pricing model. It has a strong risk control mechanism, which can easily price these traded currencies. Simply put, it can buy when no one wants to buy and sell when no one wants to sell, so the price discovery naturally becomes better.

Of course, there are also some similar products, such as HashFlow and 1 inch, which have made similar attempts. And I think the similarities in this area are significant. However, Native has a unique feature because it is a driven or fully dependent service on the platforms of various project parties. It is not a platform itself, but rather a service provider for all project parties.

What are its natural advantages? It is the ability to allow these projects to be placed on their own Treasury Token, or they can choose to place them on Uniswap or PancakeSwap. These coins can actually be given to the native liquidity provider in a decentralized manner.

This large inventory is a huge advantage, which allows market makers specializing in risk pricing to have a huge advantage, which will translate into better pricing.

Other platforms, if you don't directly provide such a large value capture to each project party, it will be difficult for you to complete. As more and more projects use it, it will gradually move the pricing power of these small currencies. I think this may be a more financial concept, but simply put, it is the best place to find prices on the entire network. It can slowly move to the project party's own platform, rather than on Uniswap, which solves the problem we just mentioned. The process of value capture may be a relatively long process.

BlockBeats: Previously, project parties would create liquidity pools on mainstream DEXs, which has almost become a rule in recent years. What are the advantages for project parties or users to use Native? What problems does it mainly solve?

Meina: The problem we are solving is to allow project parties to capture their own value in a simple and intuitive way. As I said, all their transaction fees are given to decentralized or centralized trading platforms, but when they can fully control the trading of their own tokens, the space for them to develop products actually becomes larger and larger.

Moreover, when we help them solve the technical swapping functionality and liquidity issues, no one is actually standing in the middle of them and their community. When I talked to many project parties who intend to cooperate with us, they feel that they have a community when they go to a centralized trading platform or a leading decentralized trading platform. My concept is that if you have your own product and community, why redirect your own community users to other centralized or decentralized trading platforms for trading.

You can definitely increase user stickiness and retention. If you have perfected this series of services for them, and this has been verified, Native is the previous month's time to show how convenient it is to use our infrastructure layer. We created a decentralized trading platform called Five Minute Dex, which literally means that our internal staff created this trading platform in just 5 minutes. This decentralized trading platform is still live now, and you can trade over 200 currency pairs on it, especially for small currency pairs, both in terms of depth and trading prices, which are better than many of your so-called leading decentralized trading platforms.

We found that when we launched this 5-minute decentralized trading platform and let users try the product, they found it to be very good, and we really found that more and more users are trading on this 5-minute trading platform every day.

Although our original intention was to showcase product functionality, we discovered that if your pricing or pricing is truly superior to other trading platforms, users will naturally stay on your platform. So we also want to provide the same technology to other project parties. As long as you use this Native infrastructure, no matter what stage you are in, we provide such different targeting models to support you, not only giving your community a good user experience, but also truly keeping your community in your own so-called ecosystem.

I think this is a particularly important point, and I believe this is why other project parties also want to do this. However, they were previously struggling because they didn't have the technology or time to do it themselves. So we will help you do it, and you just need to focus on your own product.

So this is why I say we are an invisible infrastructure, in fact, what we are doing is promoting the development of the application layer of the entire Web 3. We are not trying to highlight our own brand, as long as everyone believes that using our infrastructure is safe and provides the best transaction experience, that is enough.

Ricky: From the perspective of an entrepreneur, because I talk to entrepreneurs more often. In the past, it took a long time for everyone to research their own tokens and token economic design to meet the requirements of some trading platforms and market makers. They were worried that the market traffic was not enough, worried that the user traffic was not enough, and there were many game-like designs to meet the demand, which required a lot of funds, and a large part of the funds were used for listing and liquidity management. Now it's not necessary because the middleman is gone, and you face the users directly.

Facing the users directly simplifies the whole problem. You only need to face your own users and decide how much currency to take and how much to circulate for trading. Facing professional merchants, you decide how many chips to give them for pricing. The whole process can be done in a few minutes, instead of taking a long time like before. As Meina just said, many stakeholders have realized this. However, only some large projects, such as STEPN, have the technical strength and traffic to do so. Whether users can stay on it depends on this. When we invested in Native, we also saw a demand. Of course, it is not realistic for each project to make its own decentralized trading platform, firstly because it is expensive, and secondly because it involves security issues. Once there is an error, the cost will be very high.

Native actually helps everyone build this infrastructure, and after it's built, everyone can use it. They don't really need to be able to stand in front of it. But another point is that although it is an invisible layer of Dex, it doesn't need to be in the forefront. The advantage of Native that is not easy to be noticed by people is the aggregation of liquidity.

When there are enough projects using Native, its liquidity is aggregated, achieving the same effect as a centralized trading platform. For example, if I put some ETH here and someone else puts some ETH in the pool, the platform's liquidity increases. As more coins, funds, and participants join, the liquidity network becomes deeper. Pricing power will shift to Native. This way, all participating projects can have significant profits.

These two issues can be summarized as the management of coin listing and liquidity, and the ability to increase overall participation through a grid effect.

Xiaoyufu: I will briefly talk about the development trend of this Native from an investment perspective. As people in the cryptocurrency industry, we are all looking for opportunities to make a fortune. However, with the increasing number of on-chain trading users, we can find more opportunities for early value investment and wealth creation, at least in terms of price appreciation, on the chain. From the perspective of users or KOL systems, most projects have a recognition of reaching the peak in terms of user base.

Looking at it from a different perspective, many projects now have what is called "voting on the exchange". What is the essence of this? It is to allow users to deposit their coins into the exchange platform, and at this time, both the users and the project parties can earn money. However, in this process, it is gradually discovered that the convenience, depth, or influence provided by these centralized exchange platforms is being eroded by the users on the blockchain. Just like how everyone can open a store on Douyin, the so-called large supermarkets or, in a certain sense, they no longer have their unique influence. This is a highlight and advantage of the future development of Native.

BlockBeats: Native has NFTs, but there doesn't seem to be a plan to issue tokens. What is the value of NFTs? Does the team have any plans regarding tokens?

Meina: Token, our team definitely has a plan, but at this stage, we want to focus more on product development.

For Native as an infrastructure layer, the development of the product allows real users to see the trading experience. Based on this native infrastructure, it is the most important thing for us at this stage. If we step by step make the product good, then the Token will also be a matter of course. I hope everyone still maintains confidence in Native and believes in our execution. I believe that all parties will be able to achieve a satisfactory result, whether it is from the community or the project side. I will also interact with everyone in the community frequently, and you can come to me if you have any questions about our project.

BlockBeats: Recently, compared to other DeFi sectors, DEX seems to be making a lot of efforts. We have seen many improvements based on Uni v3 or products like Native. Why do you think there are still many teams starting businesses in the DEX direction, despite the fact that mainstream DEX such as Uniswap already occupy a large share of the market?

Meina: First of all, I am optimistic about the entire decentralized finance track, whether it is a directional model or a new model. The Native infrastructure layer needs to de-aggregate more and better bidding models. We provide a more complete infrastructure. For us, it is not about deciding which pricing model is the best. We focus on serving project parties and community user experience, and no matter which directional model is good for the current community users or project parties, you can find it here in Native.

Ricky: I've seen quite a lot of them. Actually, from my perspective, this situation didn't just emerge recently. It's just that recently, as everyone's products have become more similar, they have started to show themselves to the market. This has given us the impression that there are many new models of DEX AMM. In fact, they have existed since the beginning. For example, Bancor has been doing it for a long time, but their approach is more difficult. They directly attach impermanent loss to their own token, but in the end, it doesn't seem to have a great acceptance rate.

Then these new AMM models, whether it's TradeJoe or Maverick (which we invested in a long time ago), I think everyone shares a common understanding that the pricing model x*y=k is not a pricing model that we will still be using in 5 years from now, from the perspective of anyone in the finance industry, it is logically impossible.

Uniswap has done a really good job by providing the AMM model, but it is definitely not the end of decentralized trading, because it is too easy to come up with a better pricing model than x*y=k. Everyone has ideas and we are currently in a stage where many people need to try different approaches. Trade Joe, Uniswap V3, or Pancake Swap are all good attempts.

Unisat and Maverick are both great ideas. The entire pricing model of our industry will see better things emerge. From my perspective, in the past 1-2 years, during the DeFi Summer, everyone has been constantly pondering this matter. It is true that it is difficult to innovate and the development cycle is long, so it is only recently that these things have been completed and made visible to the public.

Xiaoyufu: From the perspective of a participant, there are unique group needs that are not being met, which is why this market exists, including Native, which captures the needs of a certain group of people and develops products accordingly. Like the recent hype around BRC, the trading of BRC Token gave rise to Unisat, and many of my friends are also developing products similar to Unisat, targeting only the group of people who use tokens on the BRC chain.

These founders all set small goals, as long as there is user demand that can create value. These so-called various projects will definitely emerge endlessly and are relatively profitable. Now that the big picture has been set, these very segmented or truly dissected projects can help some users from certain perspectives, and regardless of whether they can meet any needs, they will give rise to other markets.

BlockBeats: What other plans does Native Network have for the future roadmap?

Meina: This is related to the previous question. As mentioned earlier, there are many new pricing models emerging. Regardless of which pricing model wins, Native will always be there. We will support various new pricing models that both project parties and users like. We will grow together with the entire industry of this Dex race. If you are optimistic about the Dex field, then you must be optimistic about Native.

The second point is that we have already collaborated with many leading makers or professional liquidity providers, but this is not the end, it gives us a good foundation. We are going to talk to more of these leading makers to integrate their various pricing models, which will provide better and deeper liquidity.

And we can also allow the project party, that is to say, if they want to use our professional market maker pricing model, it will be more convenient. And we are also developing a standardized process called "set of process", which is the ultimate goal. The goal is to enable the project party to really integrate all the liquidity from Barbie, market makers, and their support into your APP within 5 minutes. So we will continue to make this process more efficient.

The third point is that we are also working to optimize the user experience. In fact, we have already talked to many partners and started to integrate their feedback, which has been very well received. So, it will take time to integrate and optimize these feedback and suggestions according to priority.

These three points are almost our tasks for the next 5-6 months.

It's the 5-minute DEX I mentioned before. Our advantages also include this professional pricing model. This thing is best reflected in large currencies, even if you aggregate all the percentage optimizations. But if it is those smaller currencies that are still growing, actually using the Native infrastructure to create this liquidity pool will be a more obvious optimization. Within the next 2 to 3 months, we will clearly show this feature to users. But what we want to do is how to present this information more intuitively to users. This is still an open-ended proposition that we are discussing internally. Since we are doing this infrastructure, we will also conduct different small experiments to learn and improve user stickiness to this transaction through this infrastructure. In the end, we will not only provide project parties with this technical facility, but also our experience from the experiments, including the optimized products we have developed for them to use. So we are actually growing and learning together with project parties on how to provide users with a better trading experience. Thank you, host.

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