The DeversiFi decentralized exchange recently rebranded to DeversiFi 2.0, and integrated StarkWare’s StarkEx engine, a layer 2 scaling solution that utilizes zkSTARKS.
StarkWare integration means that DeversiFi 2.0 can process 9000+ transactions per second without compromising on the privacy and low-fee advantages that non-custodial, decentralized exchanges offer.
A decentralized exchange enables transactions without the need for a trusted intermediary. Decentralized exchanges allow peer-to-peer crypto asset trading where funds remain in a trader’s wallet.
Decentralized exchanges have several advantages over centralized exchanges. These include a reduced risk of theft or loss of assets due to an exchange hack, and increased privacy. Know your customer (KYC) documentation is usually not a requirement for the use of a decentralized exchange.
DeversiFi 2.0 is the latest evolution of Ethfinex, a community-driven decentralized exchange launched by Bitfinex in 2018. Ethfinex has listed dozens of ERC-20 tokens not available for trading on Bitfinex, and offers over-the-counter (OTC) services for larger trades.
Ethfinex parted ways with Bitfinex in 2019, following a management buy out led by co-founder and current CEO, Will Harborne. The exchange subsequently relaunched, stating that “Ethfinex has now evolved into DeversiFi.”
This week’s launch of the new StarkWare-powered DeversiFi 2.0 is the latest step toward the goal of creating a self-custodial exchange for professional crypto traders in the Decentralized Finance, or “DeFi,” markets.
DeversiFi says, “Unlike other self-custodial venues, your balances clear and update instantaneously, with no danger of rollbacks or failed trades. A cryptographic Zero-Knowledge Proof of the DeversiFi state balances is then published periodically to the Ethereum blockchain.”
StarkWare is a company that aims to increase scalability and privacy on blockchains using zero-knowledge cryptographic proofs. StarkWare has created a technology called Zero-Knowledge STARKS (zkSTARKS).
zkSTARKS are a form of cryptographic proof that allows thousands of transactions to be rolled into one batch transaction on the Ethereum blockchain for settlement, which significantly increases blockchain capacity. This is called a ZK-Rollup and is an example of a Layer 2 scaling solution.
Earlier this week, Vitalik Buterin tweeted, “While everyone wasn’t looking, the initial deployment of Ethereum’s layer 2 scaling strategy has basically succeeded. What’s left is refinement and deployment.”
Following two years of development, StarkWare recently launched its scalability engine, StarkEx, on the Ethereum Mainnet. The StarkEx engine powers the DeversiFi 2.0 decentralized exchange. Starkware’s solution brings scalability to non-custodial trading on DeversiFi 2.0 by processing trades in batches and then submitting a single proof for each batch.
“This StarkWare integration will transform the functionality of DeversiFi. The solutions born out will address the key issue of scalability – but without the usual traditional sacrifices of liquidity, speed, settlement, and fees,” said Will Harborne, the co-founder, and CEO of DeversiFi.
Harborne says that DeversiFi 2.0 opted to use StarkWare’s scaling engine because it provides several advantages for traders, while ensuring a safe and secure platform. These advantages include higher throughput, rapid finality, and fewer attack vectors.
Starkware President Eli Ben Sasson added, “Commercial grade Defi needs robust cryptography and zkSTARKs are fastest in class, post-quantum safe and can easily scale to tens of thousands of transactions per second with no trusted setup. We are excited to see traders embracing self-custodial trading without sacrificing liquidity or speed.”
To give its users another layer of security, DeversiFi has added support for Ledger hardware devices, which can connect directly to the platform. Traders now have the ability to trade trustlessly, confirm transactions, and sign messages directly from their Ledger device.
“We’ve been interested in the DeFi space for some time now, and are glad to have found the right partner to ensure that users can trade DeFi assets knowing they are receiving not only a level of security that is up to the Ledger standard, but rapid transactions,” added Pascal Gauthier, CEO of Ledger.