The digital asset world has made enormous strides all through 2020, thanks to the remarkable performance of the DeFi market and its positive effects on other sectors. According to data from DeFi Llama, the DeFi market has grown in leaps and bounds to reach an over $10 billion valuation in 2020 alone. Accompanying this unprecedented growth is the explosion of DeFi applications, especially on the Ethereum ecosystem, primarily known for its programmable infrastructure. The sheer number of DeFi protocols launched in the last one year is indicative of the dynamic shift unraveling within the crypto market and how it could spur world-changing paradigms.
However, despite the incredible feats achieved so far, there are still limitations that threaten the efficacy of the emerging DeFi landscape. Much of these shortcomings revolve around the deficiencies of existing blockchain networks. For one, Ethereum, which has retained its status as the hub for decentralized finance, is grossly ill-equipped to meet the growing requirements of the DeFi ecosystem. The high demand for fast, automated, and synchronous financial services has put unimaginable strain on the network, resulting in inflated transaction fees and congestions.
Besides, these flaws have hampered the development cycle of DeFI protocols, such that developers often have to limit the scope and design of their products to fit into the unscalable and restrictive infrastructure of the Ethereum blockchain. As a result, the network is planning a series of upgrades projected to correct the frailties of the blockchain and provide more scalable systems. While this solution seems practical, the expected 2-year duration for the implementation of Ethereum 2.0 will, however, put the DeFi narrative in a temporary state of limbo. As such, it has become critical to explore other solutions, albeit with more swift and tenable implementations.
One such DeFi project that has taken significant steps to fortify its system against known systemic flaws is Lattice Exchange. Built with the combination of Ethereum infrastructure and Constellation’s Hypergraph Transfer Protocol (HGTP), Lattice has introduced a modernized and unrestrictive approach to automated markets and liquidity mining. Hence, it comes with advanced automated market-making algorithms, flexible liquidity pools, the ability to process complex data, and superior matching algorithms.
To achieve these remarkable feats, the exchange adopted Constellation’s Hypergraph Network, with a scalable communication protocol, a decentralized model, interoperable functionalities, and near-zero transaction charges. In other words, Lattice DEX provides services that encompass the real fundamentals of DeFi as well as the fast and secure components of traditional securities and financial products. Bearing these interesting details in mind, I decided to research the features of the exchange for more comprehensive information about the modalities of the project. Below are some of my findings.
Lattice’s Innovative Edge
Lattice is a digital asset exchange, unlike any other DEX currently operating in the DeFi market. The team behind this project has designed a well-tailored exchange facility for liquidity providers and DeFi users alike. According to the information made available, this protocol is free from some of the challenges associated with Ethereum-based DEXes because it relies on a more robust system that encapsulates the core requirements – security, speed, decentralization, affordability, and scalability – for a truly open financial network. The parent network of Lattice, Hypergraph, implements these main functionalities, including an infinite level of scalability, by utilizing dynamic partitioning, incorporating directed acyclic graph (DAG), and adopting a reputation-based consensus model.
However, note that Lattice will originally be developed on the Ethereum ecosystem. This set up allows it to aggregate liquidity from the entirety of the DeFi landscape and provides real-time and accurate pricing to traders. More importantly, this exchange will connect to the Hypergraph ecosystem via what the team calls the Constellation bridge to ensure that Lattice supports more advanced trading algorithms and enables cross-chain transactions. With this cross-chain implementation in place, Lattice promises to offer multiple AMM, blistering speed, computing capacity for complex data structures, cheap transactions, and immutable trading data.
How Does Lattice Compare with Other Competitors?
While comparing the features of Lattice to similar projects like UniSwap, PrimaBlock, and Bounce, I discovered that It has more compelling solutions for recurring issues like scalability, interoperability, and universal compatibility with a wide array of assets. Note that this analysis is based on the working model and infrastructural design of the protocols considered. However, this verdict is subject to the ability of the Lattice team to deliver a fully-functioning product.
What About the Reputation of The Development Team?
Considering the proactiveness of the individuals involved, their decision to adopt a unique approach to decentralized finance, and their penchant for developing a community-focused protocol, there is no shred of doubt regarding the commitment and expertise of the Lattice team. As such, the team has, in the last couple of months, managed to bag the support of prominent traditional and crypto investors effortlessly. Some of the backers of this project are Moonrock Capital, Global Digital Assets (GDA), FBG Capital, and Alphabit Fund.
Final Thought
As seen in these findings, Lattice Exchange is an exciting and innovative addition to the DeFi ecosystem. Nonetheless, due to the unique approach adopted, the team has its work cut out and will need all the expertise and ingenuity it can muster to deliver a viable product.
