Vessel Finance is a decentralized exchange (DEX) built on its native Layer-3 solution, Vessel Layer 3. Leveraging the efficiency of Zk Rollup technology, Vessel Finance aims to provide a transparent, low-fee, and user-friendly trading experience. Currently in its testnet phase and with no token launched yet, Vessel Finance represents a promising development in the evolution of decentralized finance. Hyperloop Capital Insights will provide updates as they become available.
Table Content:
The Vessel Finance Interface.
Decoding Vessel Finance’s Operational Model
Mirroring the architecture of Zk Rollup networks, Vessel Layer 3 comprises three core components: Provers, a Sequencer, and Contracts. When a trade is executed on Vessel Finance, the transaction data is validated by the Sequencer.
Vessel Finance employs a centralized Sequencer model, utilizing a single Sequencer. This approach prioritizes transaction speed and cost optimization for the development team. However, it introduces a potential single point of failure, where Layer-3 performance could be significantly impacted by Sequencer disruptions.
Post-validation and ordering by the Sequencer, the transaction data is relayed to the Prover. Vessel Finance utilizes zk-SNARK technology for proof generation, capitalizing on its speed and low data storage requirements. The trade-off for this efficiency is the need for specialized, high-performance hardware on the part of the development team.
Provers are entities responsible for generating cryptographic proofs from the data provided by the Sequencer. This proof is then sent to Verifiers or Full nodes for validation. Within the Vessel ecosystem, these proofs are verified using a SNARK Verifier.
Vessel Finance Operational Model. Source: Vessel Finance.
Following verification, the transaction data is submitted to the Ethereum mainnet for Data Availability, ensuring permanent storage on the Ethereum blockchain. Furthermore, Vessel Finance ingeniously combines Automated Market Maker (AMM) and Order-book mechanisms to create a mutually beneficial environment for both liquidity providers (LPs) and traders.
Consider a limit order to buy 1 ETH at 3810 USDT. Vessel Finance would split this order into two:
- Order 1: Purchase 0.7 ETH at 3800 USDT, with 0.4 ETH sourced from the AMM and 0.3 ETH from another user.
- Order 2: Purchase the remaining 0.3 ETH at 3801 USDT, fulfilled entirely by the AMM.
This hybrid model enables users to access potentially more favorable pricing, albeit with slightly higher transaction fees compared to traditional AMM-only DEXs. In the example above, the fee could range from 1-2 USD. However, these higher fees translate to increased rewards for LPs.
Vessel Finance: Roadmap and Development Updates
The current roadmap for Vessel Finance outlines the following key milestones:
- Q1 2024: Testnet Launch.
- Q2 2024: AMM Integration into the testnet.
- Q3 2024: Mainnet Launch.
- Q4 2024: Token Generation Event (TGE), Derivatives Trading Integration.
Team, Investors, and Partnerships
Currently, the team behind Vessel Finance remains anonymous. Hyperloop Capital Insights will provide updates as information becomes available.
On August 8, 2024, Vessel Finance successfully secured 10 million USD in seed funding, attracting prominent investors such as Sequoia, Avalanche Foundation, Algorand Foundation, and Folius Ventures.
Given its early stage of development, Vessel Finance has limited strategic partnerships. Currently, its sole partner is the Radius project.
Vessel Finance Investors.
Exploring Comparable Projects
- Thruster: A DEX operating on the Blast network, featuring a familiar interface forked from Uniswap V2 and V3.
- Meteora: A Solana-based decentralized exchange, formerly known as Mercurial.
Conclusion
Vessel Finance’s innovative approach to decentralized trading, combining the speed and efficiency of Zk Rollups with a hybrid AMM and Order-book model, positions it as a potential disruptor in the DeFi landscape. While still in its nascent stages, the project’s substantial seed funding and ambitious roadmap signal a strong commitment to its vision. As Vessel Finance progresses through its development phases, Hyperloop Capital Insights will continue to monitor its progress and provide insightful analysis for discerning investors.
