Original author: 0xFat

When cross-chain narrative was just emerging, the industry generally believed that this track was most suitable for exchanges to do, because exchanges have rich experience in asset management and can grasp user needs. Unfortunately, at that time, no exchanges really stepped in to do it, because from a profit perspective, this low-revenue business was not cost-effective. However, with the improvement of mainstream public chain infrastructure such as Ethereum and Bitcoin, decentralized applications continue to grow in multi-chain ecosystems, and the real demand of investors for cross-chain transactions is gradually emerging, and the timing for developers to invest in construction has arrived.

Industry insiders commented: Good fortune comes from timing. With one wallet, all chains converge. This wave, OKX wins.

The timing is one aspect, and on the other hand, there is also pragmatism.

According to official disclosure, OKX Web3 ecosystem infrastructure - OKX DEX has seen rapid growth in user and transaction data since the beginning of this year, with daily trading users exceeding 10,000, daily transaction volume exceeding 20,000, and daily transaction amount approaching $20 million. This article will take the development status of cross-chain trading as the starting point to explore in depth how OKX DEX achieved such results, and what their product development journey was like, attempting to restore the pragmatic side of the OKX research and development team.

About OKX DEX: OKX DEX is an important infrastructure of the OKX Web3 ecosystem, consisting of the aggregator SWAP+ and the cross-chain bridge Bridge. Similar products focus more on aggregator trading and asset cross-chain, while OKX DEX is currently the only product in the market that takes care of both.

1. Current Situation of the Industry: Improving Trading Efficiency is the Consensus for Development

1. According to your understanding, what is the current situation of the cross-chain aggregator track?

OKX DEX: Early DEXs mainly focused on on-chain asset trading issues, and the proliferation of decentralized protocols gave rise to trading aggregators. As the number of public chains and asset types increases, fragmentation of on-chain asset liquidity has intensified. Therefore, it has become very important to integrate the liquidity of various long-tail assets on the chain and improve trading efficiency, and the existence of cross-chain aggregators is to solve this problem.

Currently, cross-chain aggregators are mainly composed of cross-chain bridges and SWAP. Due to the complex development process and high cost of such products, there are not many teams developing this product. Among them, Bungee and Li.fi mainly focus on the development of cross-chain bridges, with a large number of bridges connected and users. 1inch and Matcha mainly focus on developing trading aggregators SWAP, with stable pricing algorithms and their own strengths. OKX DEX is the only product in the market that combines both.

As a DEX of OKX, we have a self-developed inquiry algorithm system that can aggregate multiple liquidity protocols to provide users with the best path and quotation. In terms of cross-chain bridges, our on-chain speed is fast, and we have access to a relatively large number of bridges and chains, supporting almost all currency cross-chain and custom cross-chain bridges. At the same time, we will keep up with the market hot chain for the first time, providing convenience for users to play various ecosystems. Of course, we have also built a backend service team that can directly receive user feedback, maximizing the efficiency of solving user feedback. In summary, the current cross-chain aggregator track is working hard to improve the efficiency of user transactions, and almost all research and development work is based on this starting point, and our OKX DEX is no exception.

2. Currently, the differences between various products are not significant. As a relatively latecomer, do you think there are moats for cross-chain DEX?

OKX DEX: As a decentralized product, DEX itself does not have a moat, but there is a moat in the field of cross-chain aggregators.

First of all, algorithm capability is the core skill of aggregator DEX. Currently, all products in the market have not open-sourced their aggregation pricing algorithms, only the contracts are open-sourced. Our task is to help users find the best path and pricing among numerous DEXs, which is essentially a mathematical problem involving linear programming and knapsack strategy, among others. At the same time, we also need to consider algorithm differences, algorithm translation, and algorithm efficiency between different protocols. From the perspective of pricing, the algorithm needs to consider issues such as prices and gas fees between different pools, in order to comprehensively find the optimal path for users. In short, it is about finding the optimal solution among a series of variables, which is a huge challenge for some Web3 startups, hence the relatively small number of aggregator products in the field.

Next is the issue of algorithm implementation, which involves a very important infrastructure - the ability to parse on-chain data. In order to find the optimal path from numerous DEXs, we must first obtain accurate data from the chain and quickly process this data. On-chain data is massive, and we not only need to deal with accuracy issues, but also speed issues. OKX has a team of hundreds of people to handle this aspect, so our infrastructure is very strong. Only after obtaining this data can we process and refine it to develop the necessary functions, making our algorithm meaningful. For users, they will find that our pricing efficiency is very fast and accurate, precisely because we have strong on-chain data parsing capabilities as a guarantee, which can provide users with the highest, most accurate, and optimal quotes.

Finally, from the perspective of cross-chain bridge, we believe that the biggest challenge is how to integrate numerous bridges with differences in algorithm logic and technical implementation. There are multiple types of bridges in the market, such as the fund pool model and the shadow asset model, and each type has several sub-types. For example, the fund pool model includes 1:1 cross-chain and AMM cross-chain, and each bridge has slightly different fees and calculation rules. Therefore, some cross-chain bridge aggregators can only connect through APIs, which leads to slow inquiry efficiency. However, the algorithm team of OKX DEX has dozens of members. We have researched and connected to mainstream cross-chain bridges in the market, and built dozens of templates based on their characteristics. As long as a bridge of the same type appears, we can automatically discover and connect to it. Currently, the number of connected cross-chain bridges exceeds 20+, including third-party bridges and official bridges.

Overall, algorithmic capabilities and cross-chain bridging capabilities are important infrastructure for building a super cross-chain aggregator, and they are also the foundation for building a moat. If there are any additional requirements, it would be micro-innovations built on top of these infrastructure, such as intent trading functionality.

3. The concept of intent trading is very popular, but there are not many who can really explain its value. As a developer, from your perspective, what conveniences can this feature bring to users?

OKX DEX: Intention trading is a product designed based on the concept of user trading needs and intentions. In this design structure of DEX, users only need to express their intentions and obtain results, and the protocol completes the intermediate process. This concept may sound complicated, but the essence of the logic is to attract on-chain market makers, scientists, and MEV arbitrageurs through a unique auction mechanism and let them participate in bidding competition to make the pricing more competitive, balance the interests of makers, takers, and LP, and improve user experience.

DEXs that focus on intent trading tend to have a product experience that is closer to traditional internet products. Users do not need to understand the complex transaction algorithm logic on the chain, and the product only serves the user's ultimate transaction intent. In this design mode, it can reduce the operation threshold, lower transaction costs, improve asset security, strengthen interaction capabilities, and facilitate the large-scale adoption of Web3, providing users with a smoother and more convenient trading experience, and even personalized trading scenarios.

Currently, there are many teams in the market doing similar things, including the veteran DEX Uniswap launching UniswapX, the top aggregator product 1inch launching fusion mode, and the popular cowswap this year all adopting the logic of intent trading. Our OKX DEX team will collaborate with UniswapX to develop intent trading functionality.

二、谈产品建设：强解析力与自动化系统是制胜关键

translates to

2. Talking about product development: Strong analytical ability and automated systems are the key to success

4. As an important part of the OKX Web3 ecosystem layout, OKX DEX can be regarded as an important achievement under the "integration of all chains". What do you think is the best way to create a truly user-friendly super cross-chain aggregator?

OKX DEX: Our basic principle is to provide users with fast and secure product services based on market trends. For example, we integrate all available bridges. Taking the Bitcoin ecosystem as an example, we have already integrated the SWFT cross-chain bridge and are currently integrating the ThorSwap cross-chain bridge. In the future, we will also pay attention to other popular trends and integrate more bridges, such as the Wormhole cross-chain bridge in the Solana ecosystem.

On the other hand, we will continue to invest in algorithm and parsing capabilities, which are the backbone of meeting user needs in areas that users cannot see, ensuring the best trading prices and the safest asset interactions. The product design concept of OKX all-in-one will also provide users with the most convenient, fast, and unified trading experience.

5. Many investors have said that cross-chain aggregators have the highest construction costs among existing DEX categories. Why is OKX willing to invest heavily in this area?

OKX DEX: Swap and Bridge have always been very important infrastructure in the Web3 field, carrying users' most basic transaction demands. This is not a short-term race. Whether the inscription track is hot, or the DeFi track is hot, or NFT, gameFi, SocialFi, etc. are hot, they will generate a large amount of transaction demand, in other words, asset transactions. The "Fi" part gives the core vitality that enables various Web3 tracks to become popular. So the most commonly used by users when trading are Bridge and Swap.

From the perspective of Bridge, users need to transfer assets between different chains in order to participate in these diverse and exciting hot projects. From the perspective of Swap, there may be multiple trading opportunities on the same chain, and users need to exchange assets in order to capture more opportunities. However, there is currently no Bridge and Swap product that supports multiple chains at the same time in the market, which increases the participation threshold and interaction costs for users.

In order to provide users with a good product experience and save them the trouble of jumping back and forth between different chains and protocols, we have decided to invest our efforts in this matter. We hope to provide users with the most comprehensive and best cross-chain aggregation trading service through practical actions. We firmly believe that serving users is our top priority and the original intention of our investment.

6、What is the development process of OKX DEX? What challenges did you encounter during the development?

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