The Original Intention and Ideal of Encryption: The Importance of On-chain Barter

In the current encryption market environment, many people have begun to question the development direction of this industry. This article explores the issue from two perspectives: first, it traces the evolution of DeFi liquidity technology, and second, it emphasizes the transformative impact of on-chain barter transactions from the perspective of economic history.

The Dilemma of Liquidity

Recently, some unusual phenomena have appeared in the encryption market:

• Bitcoin hits a new high, but most altcoins perform mediocre.
• Memecoins are popular, while valuable tokens are overlooked.
• Market participants generally feel confused and question the real significance of encryption currencies.

One important reason for this situation is that the self-expansion within the encryption market is no longer sufficient to provide the necessary liquidity for the ecosystem. Data shows that the market share of non-stablecoins is continuously declining, with most transactions being supported by USD stablecoins.

The Evolution of Liquidity

Liquidity has always been a core demand of the market. Currency is essentially an innovation aimed at solving liquidity issues. In the blockchain era, decentralized exchanges (DEX) have become a new attempt to address liquidity problems.

The development of DEX has gone through several important stages:

1. Uniswap introduces the automated market maker (AMM) model
2. Curve has developed specialized liquidity curves for stablecoin trading.
3. Uniswap V3 introduces the concept of concentrated liquidity.
4. The emergence of batch auction mechanisms, such as CoW Protocol.

Batch Auction: The Culmination of DEX

The batch auction mechanism is an important milestone in the development of DEX:

• Can effectively solve the MEV problem
• Maximize value efficiency by extending transaction time
• Break through the liquidity barriers between cross-chain and on-chain/off-chain.
• Create conditions for on-chain barter transactions

The Revival of Barter Trade

Batch auctions create conditions for on-chain barter transactions. This model has several important implications:

1. No longer relying on the US dollar as an intermediary, encryption currencies can regain control of the market rhythm.
2. Better meet the on-chain instant transaction needs.
3. Provides the possibility for DEX to surpass CEX.

The revival of bartering represents an opportunity for cryptocurrency to return to its origins and regain control of the market.

Conclusion

Despite some confusion in the current market, technological innovations in fields such as DeFi have never stopped. As long as technology continues to advance, the future of the encryption industry remains bright. For all builders who uphold their ideals, "Don't worry about the road ahead without friends; who in the world does not recognize you."