Dexter Tezos DEX : Best XTZ Based Decentralized Exchange?

The Tezos blockchain – an open source proof-of-stake (PoS) protocol with on-chain governance and high transaction speed – has developed to be one of the highly preferred decentralized platforms today, offering fast peer-to-peer transactions and smart contracts.

Of the various softwares available on the blockchain, you may have come across the exchange, Dexter. But what exactly is it — and how is it used? Outlined in this in-depth Dexter Tezos review, everything relevant about the exchange is explained just for you.

 

What Is Dexter Exchange?

A decentralized, non-custodial exchange, Dexter exists on the popular Tezos blockchain to allow users to easily swap Tezos tokens (XTZ and FA1.2 tokens).

A web frontend that brings liquidity to the platform, Dexter deploys smart contracts so that there is no requirement for the involvement of centralized order books for transactions.

With this Tezos DEX (decentralized exchange), users can exchange the native Tezos currency (XTZ) for any other tokens created on the platform, called FA1.2 (tokens that are similar to ERC20 tokens on the Ethereum blockchain).

As of Launch, Dexter Tezos supporte only two types of FA1.2 tokens; the wrapped Bitcoin tzBTC and the pegged dollar USDtz. Later on, an extensive list including GLDtz, ETHtz, and EURtz were also added.

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Who Founded Dexter Exchange?

The Dexter Tezos exchange was founded by camlCase, a technology company focused on creating Tezos-based digital products.

Another known product of the same company is Magma, a dexter-integrated mobile wallet app for Tezos. Based in Brooklyn, New York, the product developers worked on the Dexter project for just over a year, focusing on providing liquidity to Tezos exchanges.

 

When Was Dexter Crypto Exchange Created?

Bringing Tezos into the decentralized finance (DeFi) world, Dexter Crypto Exchange was first announced in 2019 in the month of July, as a ‘uniswap-inspired prototype’.

As it continued to undergo development and improvement, it wasn’t until late 2020 that the Tezos DEX was launched, going live on September 3rd that year.

 

Dexter Exchange Investors

Including the parent company camlCase, Dexter Exchange was supported by two more venture capitalists; LIGO (smart contract language developer) and the research and development company, Nomadic Labs.

 

Is Dexter Exchange Decentralized?

Built on top of the popular blockchain Tezos, Dexter is the first fully decentralized exchange on the platform that ensures users have secure control over their funds within the ecosystem.

By prioritising users’ privacy, this decentralized exchange utilizes smart contracts to keep order books.

 

Is Dexter Exchange Non-Custodial?

Before using the exchange, users may want to know — is Dexter non-custodial? Yes; As a decentralized exchange, Dexter allows users to have full self-custody of their funds on the platform; users are provided access to their private keys, therefore eliminating the need for a custodian holder to interfere.

As such, the peer-to-peer transactions enabled by Dexter Tezos are highly secure.

 

How Does Dexter Exchange Work?

Users can operate the latest Tezos DEX in two different ways, as a Dexter trader and as a liquidity provider. On Dexter Tezos Exchange, trading is transacted on pairs, such as Tezos (XTZ) and Wrapped Bitcoin (tzBTC) pair or XTZ/ETHtz pair.

Liquidity providers can provide both XTZ and any FA1.2 tokens to the liquidity pools that represent each pair. Users can then trade their XTZ tokens for other Tezos tokens without having to involve a centralized custodian to handle their digital funds.

For liquidity providers, the Dexter Exchange works by granting a trading fee that is added to the total liquidity. According to how much asset a provider has provided, they will earn tokens relevantly.

This keeps the liquidity pools functioning, and attracts more providers. From a trader’s point of view, the fee is a charge paid per transaction, and is affordable by most users.

 

What Makes Dexter Exchange Unique?

In clear contrast with centralized digital exchanges, Dexter decentralized exchange removes the unnecessary security holes caused by the interference of third parties.

But what truly sets this Tezos DEX apart from other ordinary exchanges is that it is specialised; Dexter Tezos is an Automated Market Maker (AMM).

The most popular type of AMM is a Constant Product Market Maker, and Dexter is also classified as a CPMM.

Enabling high privacy for Tezos users, Dexter Exchange offers a trustworthy and transparent cryptocurrency trading experience, completely eliminating third parties to ensure transactions are trustless and fast.

 

How To Add Liquidity To Tezos Liquidity Pool In Tezos DEX?

What is a liquidity pool? Keeping the market running, a liquidity pool is a collection of assets locked in a smart contract. These assets are given by liquidity providers, and any user can choose to become one.

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One liquidity pool on Tezos represents one specific exchange pair (such as XTZ/ETHtz).

As a liquidity provider, you are eligible to earn an exchange fee of 0.3% from the transactions that the Tezos DEX facilitates. This small percentage of share incentivizes liquidity providers to offer liquidity to different pools.

The fee is awarded when a provider chooses to remove their liquidity from the pool.

 

Follow the guide below to learn how you can add liquidity to Tezos liquidity pools:

  1. The first step to adding liquidity to any liquidity pool in Dexter Tezos is to connect your digital wallet to the exchange.
  2. Dexter supports various wallets such as Kukai and Temple wallet, as well as Magma; the wallet created by Dexter’s same developers. It is necessary to have a balance of XTZ, so make sure you purchase Tezos tokens beforehand.
  3. Once your wallet is connected to the exchange, you can swap Tez coins with a selected coin such as tzBTC. This step is significant as liquidity providers must have two different types of funds in order to add liquidity to Tezos. 
  4. On the official Dexter website, navigate to the ‘liquidity pool’ option, which will take you to the liquidity pool section.
  5. Enter values of your choice to add liquidity. With the simple design, it is fairly easy to use, and you can just as simply decide to remove your liquidity when you want.

 

Tezos Wrapped Bitcoin (TzBTC) in Dexter

Bringing the stability and liquidity of Bitcoin to the Tezos platform, the Tezos wrapped Bitcoin is a Tezos-based version of the cryptocurrency, backed on a 1:1 ratio by Bitcoin.

Users can use their Bitcoins to mint tzBTC, which can be used to explore dApps and more. Along with USDtz, Tezos wrapped Bitcoin was one of the first FA1.2 tokens to be deployed on the network.

 

Tezos Pegged Dollar (USDtz) in Dexter

The Tezos stablecoin, the pegged dollar USDtz is another one of the fungible Tezos FA tokens on the platform and has no stability fees involved. With this Dollar-pegged stablecoin, users can implement token transfers and access decentralized finances in a fairly unique yet easy way.

 

Dexter Exchange Vs Uniswap

What is Uniswap? Running on the Ethereum blockchain, Uniswap is a decentralized token exchange that enables users to swap any tokens with their ERC20 tokens.

The on-chain Dexter Tezos is similar to Uniswap in both functionality and ease of usage, as both exchanges eliminate the need to rely on a trusted intermediary while providing liquidity to their relative blockchains.

Reviewed below, see how Uniswap compares to Dexter Tezos Exchange.

Dexter Exchange Uniswap
Blockchain Tezos Ethereum
Transaction Fee 0.30% 0.30%
Supported Tokens XTC, tzBTC, ETHtz, GLDtz, USDtz, EURtz  1INCH, ETH, AST, AETH, BAT, LINK, DAI, GUSD, HBTC, REN, RENBTC, UNI, STAKE, USDC, WBTC +more
Supported Wallets Magma Wallet, Kukai Wallet, Temple Wallet MetaMask, WalletConnect, Coinbase Wallet, Portis Wallet, Fortmatic Wallet
Type Non-custodial Non-custodial

 

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Is Dexter Exchange Legit?

Before getting started with this decentralized exchange, you might have to verify; Is Dexter Tezos legit or a scam? Fortunately, as the exchange is backed by the legitimate Tezos product developers, camlCase, rest assured that the exchange is in fact real.

 

Dexter Tezos Exchange Alternatives

Currently, Dexter DEX is the only decentralized exchange available on Tezos, to swap Tezos tokens and FA1.2 tokens. However, alternatively you can exchange XTZ tokens for any other tokens such as USDT or BTC in the following exchanges:

If you’re looking for a similar exchange that works with different blockchains, Uniswap and Bancor are popular options.

 

Tezos DEX Dexter Exchange Social Media Handles

 

Social Media URL
Dexter DEX Official Website https://dexter.exchange/
Dexter DEX Twitter https://twitter.com/dexterexchange
camlCase Twitter https://twitter.com/camlcasetech
Tezos Official Website https://tezos.com/
Tezos Twitter https://twitter.com/tezos
Tezos Telegram https://t.me/tezosplatform
Tezos Reddit https://www.reddit.com/r/tezos/
Dexter Exchange Stats https://stats.dexter.exchange/

 

Key Takeaway – Dexter Exchange Review

As the first ever protocol to bring DeFi into the Tezos ecosystem, Dexter DEX is an ideal choice of Exchange, allowing users to easily swap Tez tokens and FA1.2 tokens in a secure and transparent way.

The decentralized, non-custodial exchange is simple to use, cost and time effective, and enhances user experience with dApps in the Tezos blockchain. Although still brand new to the DeFi world, the promising Dexter Exchange is sure to gain more recognition with time.

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