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Spark, a decentralized trading protocol, has announced the first fully on-chain order book for the Ethereum ecosystem. Launching on Fuel Network, the project aims to provide solutions to some of the limitations in the Decentralized Finance (DeFi) landscape and provide traders with fast, secure and transparent trading with minimal status and reduced storage.
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Spark brings the first on-chain Oder books to the Ethereum ecosystem
Decentralized trading protocol Spark is launching the Ethereum ecosystem’s first fully on-chain order book and aims to provide traders with a “secure, efficient and decentralized” experience.
According to the announcement, the state-minimized order book will move execution entirely on-chain to increase transparency. Furthermore, it will reduce the need for data storage and processing to ensure faster transactions without compromising security.
The Ethereum L2 project aims to address the limitations of Automated Market Makers (AMMS) and Centralized Exchanges (CEXs). Despite playing an important role in the growth of DeFi, AMMs have struggled to meet the “sophisticated demands of institutional traders in high-frequency and algorithmic trading.”
Meanwhile, CEXs have been criticized for the lack of transparency and control expected in decentralized systems. The project argues that DeFi should use traditional trading mechanisms to attract institutional traders.
As a result, Spark Central will introduce Limit Order Books (CLOBs) to address these limitations. CLOBs are trading mechanisms used in traditional stock markets to match all bids and offers based on time priority and price.
With this implementation, Spark will deliver better pricing, faster execution, and deeper liquidity, while maintaining security and transparency. Furthermore, it seeks to “provide the precision and capabilities needed by professional and institutional traders.”
Vitali Dervoed, CEO and co-founder of Spark, emphasized the importance of order books for institutional and retail traders who seek accuracy and transparency while controlling their assets:
Order books are the backbone of professional, institutional and sophisticated retail traders who rely on precision execution and transparency. Spark’s shift to on-chain trading represents a significant leap in eliminating the tradeoffs associated with off-chain systems. With full visibility into order depth and liquidity, users are protected from risks such as front-running and manipulation, while enjoying the security of self-control. Unlike centralized exchanges, Spark ensures users have full control over their assets, making it an ideal platform for traders who prioritize security, transparency and efficiency.
A ‘new era’ for decentralized trading?
Launched in October, Fuel is a modular operating system designed for Ethereum. After three weeks, it reached a Total Value Locked (TVL) of $33.5 million. According to facts from DeFiLlama, Fuel saw a TVL increase of 700% in one day, followed by a weekly increase of 1200%.
Spark is one of the first dApps in the Fuel Network. The Ethereum Layer 2 project is powered by Fuel’s modular architecture, with the aim of “bringing DeFi closer to mainstream adoption” with speed, scalability and interoperability.
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The projects aim to build a “new era for decentralized trading” that unlocks “new possibilities for institutional-grade DeFi” and evolves the Ethereum landscape. Ultimately, Fuel Network CEO Nick Sway noted the launch of Spark as a vehicle to “push” DeFi boundaries:
Fuel’s mission is to create an environment where builders can push the boundaries of DeFi, and Spark is a testament to this vision. Leveraging Fuel’s powerful, high-performance design, Spark introduces a new level of transparency and efficiency to decentralized finance through on-chain order book trading, setting a new benchmark for scalability and precision.
Featured image from pexels.com, chart from TradingView.com
Credit : www.newsbtc.com
