The latest news in the crypto world is UNI, the reward token for the decentralized exchange (DEX) Uniswap. The popularity of Uniswap cannot be understated: it has higher volume than Coinbase, zero token listing fees, and an already rabid following. However, despite the fanfare, Uniswap is far from perfect. High Ethereum fees for swapping tokens, a lack of charting tools, and reliance on a third-party program (Metamask) are all high entry barriers for crypto newbies. These roadblocks indicate how far DeFi has to go. For the space to thrive, better tools are needed to accomplish the goals of decentralized finance. One blockchain company, Constellation Labs, is helping DeFi live up to its potential with its upcoming Lattice Exchange.
Constellation’s first dApp, Lattice, is designed to fix the current problems with Uniswap and other DEX’s. These popular decentralized exchanges run on the Ethereum blockchain. As a base layer protocol, Ethereum is severely limited.
- Does Not Scale
- Low Transactions Per Second
- Large Fees During High Traffic
- Isolated Liquidity Pools
- No Complex Trading Algos
While the development of layer-2 solutions is ongoing, it is unknown when they will be available, let alone implemented on exchanges. Instead of “patching” the Ethereum blockchain, Constellation is building Lattice on top of its Hypergraph protocol, which went live earlier this year.
Constellation’s Hypergraph Transport Protocol (HGTP) can expand its processing capability at scale, meaning it does not suffer from congestion. In fact, the technology is fast and secure enough to satisfy the needs of the US Air Force, which partnered with Constellation in September of last year. This scalability makes HGTPs an appropriate solution for exchanges of all sizes.
Once it launches, Lattice will solve the problems plaguing the current DeFi ecosystem. Transactions will take place within seconds, have little to zero transaction fees, and incorporate off-chain data in the form of an Oracle. Oracles are not a new idea in blockchain, but so far have only been used for reference price data. Bringing off-chain data into Lattice will allow it to track, monitor, and execute functions on real-time events, like sports scores, stock prices, weather events, interest rates, and election results.
Automatic Market Makers
In addition to its scalability and flexibility, the ability to handle complex trading algorithms further sets Lattice apart from the herd. The Ethereum blockchain’s programmability limits the current generation of Automatic Market Makers (AMM); it can only perform basic functions. While Lattice will begin optimizing and speeding up current ERC20 transactions, it promises to raise AMM capabilities to those of legacy financial markets, similar to those used by quant trading firms. Currently, there are no decentralized ledger technologies that can handle this type of computationally advanced workload. Even more promising is the prospect of Lattice serving as a bridge to traditional stock markets. In the future, the stock market may very well move to a tokenized, blockchain backbone.
This is not Constellation Lab’s first rodeo. They have spent the last two and a half years working on HGTP and DAG. The team has taken time to ensure that its worldwide launch is successful and the platform is robust enough to handle any tasks set before it. They have sent a warning shot across the bow of other blockchains and decentralized ledger technologies with Lattice. The team will have more announcements once their private sale is complete. We expect this project to have impactful and far-reaching effects on a wide array of industries.
*Disclaimer – DAG is our Media Partner, and this content is possible through their support. The above article does not represent financial, investment or trading advice and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.