Vertex, a decentralized exchange (DEX) for the spot and derivatives trading of digital assets, has gone live on Arbitrum (ARB), a popular network built atop the Ethereum blockchain.
Vertex, which had been operating on a test network, combines an off-chain order book layered on top of an on-chain automated market maker on a decentralized, self-custodial exchange. The firm, which has bases in Singapore and the Cayman Islands, counts Jane Street, Dexterity Capital, Hudson River Trading, GSR, Collab+Currency, JST Capital, Big Brain and Lunatic Capital among its early backers.
The messy collapse of FTX and other centralized trading platform blowups last year has fueled a shift toward decentralized exchanges and self-custody. Ethereum layer 2 system Arbitrum is now the fastest-growing blockchain in total value locked and has surpassed Ethereum in daily transaction volume.
The Vertex team has been working on the protocol for about a year. Co-founder Darius Tabatabai said the platform has drawn interest from institutional traders and from retail traders who use Arbitrum.
“We built all the smart contracting ourselves, so we’re not forking anything,” Tabatabai said in an interview with CoinDesk. “The [automated market maker] is quite conventional, but we have a bunch of tech under the surface that enables you to do leveraged AMMs, to do looping, and we have an inbuilt money market. So you can think of it as a combination of Aave, dYdX and Uniswap, with an order book.”
Building Vertex on Arbitrum and using an off-chain sequencer for the order book has enabled the venue to process between 10,000 and 15,000 transactions per second with the ability to match orders in 10 to 30 milliseconds, a speed that rivals leading centralized venues and surpasses that on other decentralized exchanges, Tabatabai added.
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