Analysis | How the OFZ achieves exchange for stable cryptocurrencies

Why is it necessary to achieve cross-chain exchange of stable cryptocurrencies?

The public chain market has gradually formed a pattern of multi-chain coexistence after the rapid development of public chains such as Binance smart chain BSC and Huobi ecological chain HECO, with the help of which, DeFi market has grown explosively.

As there are some differences in the income of DeFi products, in order to improve the rate of return, the rapid flow of crypto assets on different chains has gradually become a rigid demand. The circulation of stable coins is a major problem in the market. Users transfer assets on different chains on different centralized platforms manually for a long period. The registration on different platforms requires its own KYC process that is time-consuming and laborious, which is not friendly to DeFi users.

In this case, the demand for cross-chain exchange of cryptocurrencies within one platform is extremely huge. Therefore, a solution to solve the problem of asset circulation between chains by means of cross-chain bridges is worked out.

A cross-chain bridge provides a compatible channel between two different public chains, allowing one chain to obtain transactions data that take place on the other chain through the oracle service. The essence of cross-chain bridge is to swap the same kind of assets between two chains with the help of asset mapping.

OFZ as a decentralized cross-chain trading protocol launches at the historic moment that enables stable coins and other cryptocurrencies exchange across chains rapidly that save significant time and cost.

Principle of Cross-chain for stable coins on OFZ

Introduction of OFZ

OFZ is a decentralized cross-chain exchange that enables stable coins and other anchor crypto assets, like ETH, BTC, etc. to be swapped among multi-chains. OFZ aims to solve the problem that assets among different public chains are isolated and cannot circulate permissionlessly across-chain. Compared to centralized exchanges, OFZ has lower transaction fees and a better user experience. OFZ’s slippage control is markable in line with Curve, a top-tier project on the same track.

OFZ enables conversion for almost all major stable coins including DAI, USDC, USDT, HUSD, etc. that can meet the vast majority of user needs. In addition, OFZ supports cross-chain exchange between BTC pegged assets such as WBTC, BTCB, HBTC, etc., and the cross-chain exchange of ETH among public chains. OFZ makes cross-chain circulation of core cryptocurrencies more freely, thus significantly improving the efficiency of exchange of various cryptocurrencies among different chains.

OFZ exchange principle

OFZ is equipped with the features, like swa

p and pool. Swap provides cross-chain asset trading services for users, and pool allows users to provide liquidity of single assets on different chains to gain rewards as liquidity provider in the form of OFZ token.

How the OFZ achieve cross-chain swapping? Here is the story, the asset on originating chain will be mapped to the lock contract on medium chain when users initiate a transaction, and will be converted into the mapped asset of the target chain in cross-chain pool on the medium chain. The converted mapped asset will be destroyed, at the same time, the lock contract on target chain will send the corresponding original asset to the users’ wallet on target chain.

For example, if I have 1000USDT on the Ethereum and transfer it to BSC chain, the whole exchange process within the system is comprised of the following seven steps:

1. 1000 USDT will be transferred to lock-up contract on Ethereum from my wallet after I initiate the transaction.

2. At this time, the oracle service detected the transaction and sent a mint order to the mint contract.

3. The mint contract will mint 1000aUSDT and sent to the LP contract for exchange (SWAP).

4. LP contract exchanges the 1000bUSDT through the AMM algorithm and sends it to the mint contract.

5. The mint contract sends the 1000bUSDT to the destruction address for destruction.

6. The cross-chain oracle service detects the transaction of the destruction address and sends a command to the lock-up contract of the BSC chain.

7. The lock contract of the BSC chain sends the 1000USDT to my wallet address on BSC chain.

But for me, the operation is very simple. Just initiate and authorize the transaction!

OFZ: cross-chain version of Curve

Unlike other cross-chain protocols, OFZ implements its own cross-chain oracle service. Currently, the cross-chain services commonly used in the whole market are Poly Network, Polkadot and so on. The cross-chain oracle services built by OFZ also is aimed to adopt a completely decentralized way to provide help and support for more projects in the future. The OFZ team firmly believes that the ultimate solution of cross-chain oracle service is completely decentralized, the execution commands are signed by multiple nodes at the same time.

Our design concept is that all commands issued by a cross-chain oracle should be signed, and should be monitored in real-time by all the nodes. The commands are packed and passed on to a further step only if more than half of the nodes sign. The dual mining mechanism of liquidity mining and transaction mining will provide users with the best transactions experience. At the same time, OFZ has an innovative economic model. In the future, we will implement several oracle nodes that contribute to the whole project for cross-chain oracle service by node election or community vote. Those nodes will be rewarded with corresponding platform tokens.

Curve must be no stranger to everyone. To put it simply, OFZ is an upgraded version of Curve. many users still suffer from the unacceptable high slippage during daily transactions of stable coins on CURVE. OFZ addresses the exchange of cross-chain stable coins or crypto pegged assets deployed across chains. Besides paying relatively low gas fees, to users, completing the conversion of cross-chain assets at a ratio of 1:1 matters the most. For this occasion, the OFZ team thoroughly analyzed the AMM algorithm of CURVE and optimized it. The slippage in transactions is further reduced by optimizing scalars automatically and auto-adjusting price boundaries based on liquidity.

In the future, OFZ will upgrade and optimize the algorithm of swapping stable coins or crypto pegged assets and strive for minimizing slippages during transactions.

Summary

The volume of DeFi is growing, investors throughout the cryptocurrency industry are focused on a variety of concerns, the number of DApp deployed and developed in each chain has been increasing, but as far as products are concerned, cross-chain trading is a very important track. At present, the stable coins broken the barrels among the mainstream public chains is the greatest significance.

OFZ breaks the boundary between chains, services users as platform where users can exchange stable coins across chains with low transaction fees, and gives new energy to the whole cryptocurrency ecology.

The stable coins feature the blockchain industry a sustainable development environment, allowing the cryptocurrency market to get rid of the market impression of skyrocketing and plummeting. Stable coins are treated as a recognized value anchor. Half of the problems of cross-chain has been solved once stable coins can move quickly between different public chains with low slippage. On the other hand, the cross-chain of stable coins is capable to connect the whole market and realize the prosperity of cryptocurrency.

About OFZ：

OFZ is a decentralized cross-chain exchange that enables stable coins and other anchor crypto assets, like ETH, BTC etc. to be swapped among multi-chains.

OFZ aims to solve the problem that assets among different public chains are isolated and cannot circulate permissionlessly across.

In term of cross-chain transaction, comparing with other DEXes in the market, OFZ charges are lower, the experience is better, and the asset exchange itself is more secure.

Note: OFZ is currently in public beta.

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📍 Website: https://ofz.com/

🕊️ Twitter: https://twitter.com/ofz_com

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