Having enabled Indians the option to buy and sell cryptocurrencies, the Binance-owned digital currency exchange, WazirX, is set to introduce in India the Decentralized Finance (DeFi) ecosystem. The exchange is looking to achieve this by launching a so-called WazirX AMM protocol that will run on Matic Network, rather than the popular DeFi ground network Ethereum.
WazirX AMM protocol testnet launches in September
An Automated Market Maker or AMM protocol enables the options of exchanging tokens even without an order book, and it is considered one of the most innovative applications of DeFi. AMM allows for a decentralized exchange of tokens, and it forms liquidity pools for trading in place of order books. An instance is Uniswap, which allows users to deposit crypto into a liquidity pool, and earn trading fees in return.
The testnet for WazirX AMM protocol will be rolled out in September, the exchange said, adding that:
We strongly believe in a decentralized future. DeFi is bringing in financial equality and financial access to everyone in the world. After having made it easy for Indians to access Crypto, WazirX now plans to make it easy for Billions of Indians to participate in the DeFi ecosystem. We aim to onboard everyone in India to the DeFi revolution.
WazirX chooses Matic not Ethereum
Following the report, the WazirX AMM protocol will be launched on Matic Network instead of Ethereum, which has been the leading ground network for most DeFi projects. For one thing, the cryptocurrency exchange mentioned that Matic’s Ethereum Layer2 would provide advanced security, high scalability and throughput, and low gas fees.
However, WazirX pointed out that the gas fees on Ethereum have been incredibly high. This high cost makes Ethereum unviable for most DEX to use, said WazirX. Meanwhile, the exchange’s native cryptocurrency dubbed WRX, a significant role in Wazir AMM protocol management.
The exchange plans to use WRX as a governance token. Thus, certain decisions will be determined by the cryptocurrency holders.