Solana is one of the most successful projects released in recent years. In just two years of existence, Solana has managed to attract hundreds of developers and become the main platform for many successful DeFi, NFT, Web3 and lending projects. We invite you to explore the benefits of Solana and which three decentralized exchanges have become the hottest Solana projects.
Benefits of Solana
From an end-user perspective, Solana and Ethereum are open source blockchains that enable the creation of smart contracts. However, if you dig deeper, the blockchains in question have different architectures and therefore different advantages. The Solana blockchain was launched in 2020 and contains eight innovative technologies. These include the world's first parallel smart contract execution environment, Seavel, which allows tens of thousands of contracts to be executed simultaneously. Gulfstream is an alternative transaction routing protocol that allows for greater throughput. The Turbine block allocation protocol solves the scalability problem. The advanced Proof of History (PoH) protocol and "Tower BFT" facilitate consensus mechanisms for the Solana network.
These technologies allow Solana to achieve incredible speed - more than 50,000 transactions per second, and at the same time remain a cost-effective platform for both users and developers - fees do not reach more than $0.01. In addition, Solana is one of the most secure and decentralized blockchains. More than 1,700 nodes are responsible for the operation of the network. Due to its advantages, the Solana blockchain is becoming increasingly popular among developers, and Solana's decentralized exchanges are characterized by speed, security and the lowest trading fees in the industry.
Solana's Top 3 DEX
Raydium is the most popular and capitalized decentralized exchange on the Solana blockchain. Raydium launched in 2020 in collaboration with Solana and Serum DEX. The exchange has a unique hybrid architecture, that is, Raydium's automated market maker protocol interacts with the serum's central limit order ledger. This approach guarantees a high level of liquidity and the best exchange rate. Raydium analyzes the most advantageous exchange option (AMM or serum order book) and provides the best offer. Raydium's interface is lightning fast and cost-effective thanks to the use of Solana. Raydium trading fees are approximately 0.25% per transaction plus the Solana network fee.
In addition to cheap and fast swaps, users can also use additional tools. Any user can become a liquidity provider and receive a portion of the pool's trading fees. 0.22% of the 0.25% of the pool's trading fees goes to reward the liquidity providers and is distributed according to their stake in the pool. In addition, liquidity providers can participate in mining and receive rewards from RAY. There are also Fusion pools where liquidity providers can receive tokens for third-party projects as a reward.
Raydium also provides a launchpad to developers of new Solana dApps, under which they receive funding in three steps. Also, their tokens then become available for trading with Raydium and Serum.
Serum is one of the leading decentralized crypto exchanges on the Solana blockchain. The exchange was launched in 2020 with the support of a number of experts in the form of the crypto exchange FTX, the trading platform Alameda Research and the Solana Foundation. Serum runs on a central on-chain limit order ledger (CLOB) and supports cross-chain asset exchanges.
Thus, Serum's interface is familiar to many traders as it resembles a standard trading terminal on centralized exchanges. That is, if in most DEXs that work on the basis of an automated market maker, traders cannot independently choose the price, size and some other parameters, then Serum does not abandon the order book model and does not deprive traders of this opportunity. The order book is filled with liquidity providers, including market aggregators on other exchanges. Serum's benefits include extremely low trading fees — only $0.00001 per transaction and incredible speed.
An internal SRM token was issued to manage the protocol, originally created as an SPL token on the Solana mainnet, albeit with the ERC20 version on the Ethereum blockchain. The token has three key functions: management, staking and fee reduction. Thus, SRM holders get additional discounts on trading fees — up to 60%. In addition, they have the opportunity to vote on the development and improvement of the protocol.
Orca is a user-friendly decentralized exchange based on an automated market maker. Solana enables Orca to operate efficiently, quickly and with minimal fees. This AMM uses the Coingecko platform to ensure a fair price. When exchanging tokens, users pay two types of fees — a liquidity provider fee (from 0.07% to 0.3%, depending on the pool) and a network fee (0.0001 — 0.001 SOL). Since the Orca exchange has become one of the most popular, huge volumes of cryptocurrencies are traded on this platform. Also, many buy and sell orders are opened every second. This means that any coin can be bought or sold conveniently at a fair market price.
In addition to token exchanges, Orca also provides an opportunity for users to become liquidity providers. Liquidity providers receive 0.3% of all transaction fees in their pool (depending on pool share). Additionally, every two weeks, Orca randomly selects some pools to become Aquapools, where liquidity providers receive additional ORCA rewards.
The exchange periodically holds various events. For active participation in the ecosystem, users can earn marine-themed NFTs. In addition, Orca NFTs are divided into seven rarity categories. For example, the NFT Killer Whale was transferred to the most active liquidity provider.