Introducing EXA Finance’s Protocol
With the success of NFTs becoming mainstream over the past year, more and more NFT Marketplaces are emerging. Platforms like OpenSea, Rarible, LooksRare as well as Coinbase NFT just to name a few are battling to get their market share. The main traction and adoption currently reside within the Ethereum ecosystem but NFTs on other chains like Solana or Tezos are also getting some attention.
What about the Algorand ecosystem?
The state of NFTs on Algorand
NFTs on Algorand are still under the radar at this time. One of the reasons could be that the Algorand ecosystem has not gotten its spotlight moment as a Layer-1 blockchain. This can also be seen as the TVL is relatively low: about $130M at this moment compared to Ethereum which gathered itself about $70B in TVL according to Defi Llama.
However, there are a few projects that stand out like Al Goanna which is currently the most popular NFT collection on Algorand backed by a group of VCs and supported by a strong community.
Moreover, Algorand is gearing up with major partnerships such as becoming the official blockchain partner for the 2022 FIFA World Cup with a plan of issuing NFTs, acquiring Napster an audio streaming service provider, or LimeWire pivoting to build an NFT Marketplace for artists using the Algorand protocol.
EXA Finance protocol
The EXA Finance protocol introduces a new range of possibilities for peer-to-peer trading on the Algorand network.
Unlike other marketplaces, the protocol allows users to:
- Trade both NFTs and fungible tokens
Unlike Ethereum where NFTs use ERC721/ERC1155 standards and fungible tokens use the ERC20 standard, Algorand assets share the same standard called ASA (Algorand Standard Assets). This gives the ability to natively support a wide range of operations without any extra layer.
- Exchange up to 4 assets* at once (bundle of assets)
Up to 4 assets can be bundled for sales at the moment.
For instance: a user could sell 2 Flemish Giants NFTs + 1 Pixel Squirrels NFT + 20,000 ALGO for 1 Al Goanna NFT.
Important to point out that the 4 assets limit could be extended in the future according to market needs.
- Sell NFT for any type of assets
Users are not just limited to the native ALGO payment token, any type of ASA can be used as a payment method thus enabling NFT to NFT trades by design.
- Make offers
Negotiate with any user for both NFTs and fungible tokens.
- Perform standard sales & auctions
*assets here refer to NFTs and fungible tokens.
As mentioned in the last section standard sales and auctions can be performed.
- Simple sale — Baskets* are sold for a fixed price specified by the seller. This sale can be made public (to the market) or private (to a specific user) and can have start and end listing dates.
- Shopping cart — A basket containing an amount of a single asset type, where different buyers can purchase fractions of the amount of the asset available.
- Normal auction — Potential buyers bid in an auction in order to claim the assets in the basket, and the highest bidder wins.
- Reverse/dutch auction — The price of a basket is reduced according to the progression of time.
*basket(s) represent(s) the container(s) whereby assets are sold
Being built on Algorand, the protocol natively inherits essential features such as:
- Low gas fee
Network fees cost less than a penny. This limits the risk of paying more fees than the value of the asset itself, opening the doors to new users and use cases.
- Low carbon footprint
Its Pure Proof of Stake (PPoS) consensus algorithm makes Algorand a sustainable blockchain with very low power consumption in contrast to other chains. In addition to that, it offsets its additional carbon footprint with environment-focused organizations (more details are provided here).
- Low block confirmation time
It takes less than 5 seconds for a transaction to get validated.
Smart Contract Audit
User security is at the center of our process. This is why a 7-weeks audit of the EXA Finance protocol has been performed by Runtime Verification. All the potentially critical issues have been addressed, and the great majority of the informative findings and general recommendations have been incorporated as well. The full report is publicly available here.
More audits will be performed in the future as the protocol evolves and Bug Bounty Programs will be launched as well to prevent security threats and vulnerabilities.