New Attempt of Decentralization Derivatives Trading Exchange: MUFEX

If a decentralized contract exchange can implement Google account login, its audience will be significantly expanded. If a platform can provide the user experience of a centralized exchange while allowing users to have complete control over their assets, then when centralized exchanges face a crisis of trust, such a platform will undoubtedly attract a large number of users.

MUFEX (full name Most User Friendly EXchange) is an emerging decentralized derivatives trading exchange, aiming to combine the rapid launch advantages of GMX and the high ceiling characteristics of dydx.

The Core Mechanism of MUFEX

1. Adopt an asset self-custody model similar to DYDX, ensuring that users can forcibly withdraw funds at any time.
2. Introduce the Account Abstraction (AA) wallet solution, supporting Google login and other more convenient user experiences.
3. Use a hybrid order book system that combines GMX/GNS type passive market maker liquidity pools (MLP) and traditional market makers.

Mechanism Analysis

Asset Self-Custody

After the FTX incident, users' trust in centralized exchanges has decreased, and the self-custody model can effectively address this issue. While the degree of decentralization in trading matching is also important, users are more concerned about asset security in comparison.

Account Abstract Wallet Solution

After a year of rapid growth, GMX's user growth has stabilized, with an average of about 2000 daily active users, of which approximately 1000 are contract trading users. To break through this bottleneck, MUFEX has adopted an account abstraction wallet solution, significantly lowering the user entry barrier. This allows users to log in using their email or Google account, greatly enhancing the user experience.

mixed order book

The order book system of MUFEX integrates passive MLP and traditional market makers. The MLP part is similar to the dynamic slippage model of GNS, allocating liquidity based on external spot data. At the same time, MUFEX also supports market makers in providing liquidity through APIs. This hybrid model is expected to enhance the platform's development potential by introducing more external participants while retaining the successful experience of GMX/GNS.

The Goals and Advantages of MUFEX

1. Ensure the security of assets at the DEX level
2. Provide a user experience at the CEX level
3. Achieve low slippage trading for GMX/GNS
4. Maintain the composability of GLP
5. Use the order book to increase the upper limit of scale

The design philosophy of MUFEX reflects the importance of user experience in the DeFi industry. Although perpetual contracts were originally pioneered by Bitmex, exchanges like Binance later gained a larger market share by optimizing operations and user experience. A good user experience is particularly important for contract users who trade frequently.

The emergence of MUFEX marks the beginning of competition among DeFi derivatives trading platforms in terms of user experience. Although it is currently impossible to predict its actual effects, MUFEX's innovative attempts undoubtedly bring new possibilities to the industry. As testing progresses, the market will witness whether MUFEX can successfully translate its design concepts into practical advantages.