The rise of mobile abruptly changed the daily lives of people all over the world. It is virtually impossible to find an average individual who does not have a smartphone and does not interact with the internet via mobile.
Also, nowadays it is plain to see that the evolution of mobile and fintech go hand-to-hand. Mobile technology heavily affected the way people interact with their finances, especially when it comes to applications for investment and instant payments.
Tokenlon is a new platform that brought a mobile solution focused on crypto trading, structured upon the 0X protocol smart contract.
Decentralized Exchanges – DeFi’s Flagship
A big chunk of the billions of dollars locked in decentralized finance is directly associated with the performance of DEXs (decentralized exchanges). In the past, the process of exchanging cryptocurrencies was dominated by centralized players (e.g., Binance, Coinbase, etc.).
With the rise of Ethereum-based cryptocurrencies (ERC20, ERC721), DEXs became increasingly popular. The trend was boosted even more in 2020, influenced by yield farming, food tokens, and complex strategies involving multiple protocols.
Learn more: Are derivatives the future of DeFi?
However, the success of DEXs is not a typical hype train. Instead, DEXs are a product of the evolution in cryptocurrency trading, offering a non-custodial, automated, cost-efficient, accessible and intuitive manner to buy-and-sell digital currencies.
Currently, some of the biggest names in the DeFi industry are DEXs, which summed hold more than 5 billion in Total Value Locked (TVL) by themselves. It is virtually impossible to talk about DeFi and simply ignore platforms such as Uniswap, SushiSwap, Curve, Balancer, Bancor, and Kyber.
Tokenlon aims to go beyond by offering a mobile solution to allow users to experience secure, reliable, and seamless cryptocurrency trading.
What is Tokenlon?
Tokenlon was set up originally as the built-in DEX for imToken Wallet. The project eventually gained independence in mid-2019 due to an upgrade in the wallet’s format.
The imToken wallet already had previous versions that were natively integrated with the Kyber protocol. However, the new upgrade brought a new version of the DEX combining the infrastructure of 0X and a user-friendly design.
Tokenlon allows users to trade cryptocurrencies wallet-to-wallet via on-chain atomic swaps, which means the platform is fully decentralized. Thus, as trade happens directly from one wallet to another, there is no need to lock up funds into the exchange.
Further reading: Main benefits of decentralized currency
The platform employs off-chain matching, in which market makers provide the best price quotations whenever it is needed. Users can check the final price before trading, turning down the offer, or clicking for instant confirmation.
The settlement process is on-chain, so when users proceed to trade, orders are signed and sent to the 0X protocol smart contract. Once all procedures are completed, swaps materialize after one or two Ethereum blocks, and users receive their new tokens using their imToken wallet.
Dig Into It
Tokenlon utilizes a unique system of RFQ (Request for Quotation) system, aiming to bring the best user experience to crypto traders.
The platform’s unique system allows them to have actual competitive rates. They aggregate hundreds of quotes from professional MM’s (Market Makers) off-chain, which leads to an efficient final equation in which the user is benefited by the best quotes available.
Plus, Tokenlon offers a seamless and intuitive user experience. A common issue among DeFi newcomers is the hardship they face when they have their first contact with DEXs. Typically, most DEXs require some level of savvy or experience from users.
Nonetheless, Tokenlon wants to facilitate crypto trading, especially when it comes to mobile platforms. Users can choose between the available token pairs and swap between them just using a few clicks.
Optimizing to Attract
The Tokenlon team spends a lot of time in user research, which includes interviews, to find out what is good, what needs to be changed, and what are the best upgrade ideas for the future.
During research conducted before the project materialized, they discovered that many users who wanted to trade crypto in a decentralized manner would face hardship at some point in the process.
They discovered that individuals who were not familiar with decentralized exchanges would typically drop out when they had to authorize the token for a transaction or when they did not have any Ether to cover gas costs.
Further reading: Is Yam Finance the next DeFi star?
Hence, they developed a way around these procedures, in which people using Tokenlon do not need to have authorizations or even to face any gas costs. Tokenlon employs a unique structure in which the trading and token authorization become a single transaction from the user’s perspective.
When users do not have enough Ether to cover gas costs, the platform sends a small amount of ETH so anyone can cover the initial gas costs to complete the token authorization and perform the swap.
Supported Tokens
Currently, Tokenlon has a list of 19 supported tokens. The list includes imBTC, which is an Ethereum token that is valued 1:1 with Bitcoin. The platform allows any imBTC holder to mint, exchange, redeem and receive imBTC tokens easily.
Although imBTC is not a freely issued token, it is possible to generate it by locking an identical amount of BTC within the exchange, all done transparently and easily verifiable.
Users have two options to obtain imBTC tokens. First, they can use ERC-20 tokens to purchase imBTC on the exchange itself. Besides, it is possible to use Bitcoin (BTC) to convert imBTC via imBTC DApp.
Other well-known cryptocurrencies supported by Tokenlon include:
- Ethereum (ETH).
- 0X (ZRX).
- Dai (DAI).
- Tether (USDT).
- Kyber Network (KNC).
- TrueUSD (TUSD).
- Paxos Standard (PAX).
- Loom (LOOM).
- OmiseGo (OMG).
Trading Limits and Fees
Tokenlon has a list of supported trading pairs and the correspondent list of minimum and maximum trading limits. When it comes to the minimum limit, the adjustment is based on miner fees for all trading pairs.
The maximum trading limit varies for different pairs. While most have a maximum limit of $30,000, some trading pairs are limited to a maximum of $500 or $250.
The fee policy used by Tokenlon is determined by the price of the trade fee and network gas fee. As both prices fluctuate, only the higher fee is charged. Typically, the trade fee between stablecoins stays around 0.1%, while other pairs stay around 0.3%.
On the other hand, the network gas fee is determined by the situation of the Ethereum network at the moment of the transaction. Tokenlon acts by adjusting the network gas fee dynamically, to ensure transactions will be completed successfully.
If the trade is to sell ETH, the transaction is broadcast to the blockchain by itself, so Tokenlon does not charge users any network gas fee. Any charged fees are deducted directly from the token received from the trade made by a user.
Conclusion
Tokenlon is an Ethereum-based platform focused on the cryptocurrency exchange. It is based on smart contract technology and utilizes 0X protocol to leverage the potential of token swaps, to deliver users rapid, convenient, and seamless transactions.
The platform reunites the best of decentralized exchanges and mobile trading experience. The process of matching is done off-chain by seasoned professionals, while the settlement is done entirely on-chain.
Heavily focused on user experience, Tokenlon offers an easy-to-use mobile trading tool for individuals who need decentralized and secure smart contract-based decentralize