What TON's DEX Ecosystem Needs to Compete with Ethereum and Solana

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Trading is the absolute core of the crypto world. However, how users execute these trades varies greatly depending on their preferences and the ecosystems they engage with.

Centralized exchanges (CEXs) handle the vast majority of the industry's trading liquidity. They offer high matching efficiency, deep order books, and fast transaction speeds thanks to their centralized architecture.

In the native world of public blockchains, however, decentralized exchanges (DEXs) powered by smart contracts are the heart of on-chain trading and the core of on-chain business liquidity. The token listing and trading rules on DEXs maintain the same permissionless nature as the underlying blockchain, creating a stark contrast in "accessibility" compared to CEXs.

Looking at any major blockchain, you'll typically find a core DEX that energizes the entire chain's business and ecosystem. On Ethereum and Solana, we've even seen entire "token business pipelines" built around their DEX infrastructures.

In the current market cycle, The Open Network (TON) has risen to prominence. Yet, its ecosystem remains in its early stages of development. The DEX applications on TON are particularly underdeveloped, appearing scarce and functionally limited. Compared to the mature landscapes of Ethereum and Solana, what must TEX's DEX ecosystem do to evolve?

The Mature DEX Ecosystems of Ethereum and Solana

There is no doubt that Ethereum and Solana currently host the most mature DEX ecosystems.

Ethereum's DEX scene benefits from years of DeFi development, while Solana's DEX growth is fueled by its high performance and immense ecological hype. Trading volume on Solana DEXs has even reached levels that rival those of major CEXs at times.

Let's examine the DEX development on each chain.

Ethereum's Evolutionary Path

The earliest major DEX on Ethereum was Uniswap, which pioneered the Automated Market Maker (AMM) model. It uses pools of tokens deposited in equal proportion to provide liquidity for trading pairs.

Throughout its iterations, Uniswap V1 represented the simplest AMM version. V2 optimized trade matching and liquidity provider (LP) features. V3 introduced the ability to provide liquidity within specific price ranges, catering to professional liquidity providers, and remains the operational version today. Furthermore, Uniswap is developing V4, which aims to include features like limit orders.

These evolutionary steps show Uniswap continuously upgrading to provide more sophisticated asset management tools for LPs, all while ensuring a smooth trading experience for users. This represents a key optimization direction for DEXs.

Beyond simple swaps and AMM liquidity pools, Uniswap has excelled in other areas. Its AMM pools create natural opportunities for Maximal Extractable Value (MEV) due to arbitrage opportunities that arise during trade execution. The token prices within these pools also serve as critical data points for other applications reading prices on-chain.

Consequently, Uniswap holds inherent advantages concerning MEV and oracles. It maintains a degree of MEV resistance to mitigate threats like sandwich attacks and excessive slippage. For oracles, DEXs often provide the fastest source of token pair prices and the most comprehensive data, leading many DeFi protocols to choose DEX-based oracle solutions over alternatives like Chainlink. This allows DEXs to export "oracle" capabilities as a data module for other DeFi applications like lending protocols and derivatives markets.

While Uniswap is synonymous with DEXs, the need for specialized functions is met by other players. Ethereum hosts various DEX types, including long-standing AMMs like Balancer, Curve, and Sushiswap, as well as aggregators like 1inch, MetaMask Swap, and Matcha.

Balancer introduced more granular control to the concept of on-chain liquidity centers. It allows for liquidity pools with custom token weights and multiple tokens, moving beyond Uniswap's equal-weight model. This flexibility benefits projects in liquidity provision and market cap management. Additionally, Balancer replaced traditional Launchpad抢购 (snatch-and-buy) models with the Liquidity Bootstrapping Pool (LBP) model, which offers a fairer price discovery mechanism and reduces the impact of front-running bots.

Curve primarily showcases the market for on-chain stablecoin trading. It provides liquidity for various stablecoins and pegged tokens (pTokens), which act as essential intermediaries in DeFi transactions and economic mechanisms, sometimes serving as buffers.

Beyond token swaps, DEXs like Balancer, Curve, Sushiswap, and DODO offer another crucial service: staking pools for LP tokens and various pTokens, enabling compound yield on assets. These DEXs not only aggregate AMM liquidity but also act as a supply layer for DeFi applications.

In summary, Ethereum demonstrates a mature, multi-faceted ecosystem built around its DEXs. However, Ethereum's slower transaction confirmation times shape how these services evolve. When confirmations are faster, or on-chain data feedback is near-instantaneous, business models can take a different form, as seen on Solana.

Solana's High-Speed Approach

The DEX experience on Solana is nearly identical to using a CEX. When transaction confirmations are extremely fast, the distinction between a DEX and an aggregator blurs. The focus shifts from capturing all user activity within a single platform to efficiently locating the best trading pairs and their corresponding LP pools.

This necessitates more sophisticated support for LPs. Since Uniswap V3 introduced concentrated liquidity (fixed price ranges), innovative DEXs have incorporated advanced price management tools for LPs.

On Solana, Jupiter is renowned for its intricate design, while Meteora offers some of the most精细 (fine-grained) LP pool functionalities. Meteora focuses heavily on providing liquidity for trading pairs, offering LP features that include not just price ranges but also custom token volatility curves and ratios. Jupiter, besides rich LP functionalities, emphasizes token issuance and user-centric features like Dollar-Cost Averaging (DCA) for scheduled, batch purchases.

Furthermore, virtually every wallet on Solana integrates on-chain trading pair aggregation. With incredibly fast transaction times, users often don't need to visit a specific DEX website or app to perform swaps; they can execute trades directly from their wallet interface.

This highlights a key design principle for DEXs on high-performance blockchains: functionalities should be modular and plug-and-play. This allows any user entry point, like wallets, to seamlessly integrate swap modules, leveraging the DEX's liquidity whenever a user needs to trade. 👉 Explore advanced DeFi strategies

The Current State of DEXs on TON

Given the maturity of DEXs on Ethereum and Solana, how does TON currently compare? What is the gap, and where exactly does it lie?

TON's performance and capacity are among the few that can rival Solana's. However, TON's ecosystem is a hybrid model blending Web2 and Web3 elements. This blend often technically deepens Web3 integration while simplifying the user experience to feel more like Web2.

This characteristic is evident in TON's DEX landscape. For instance, Telegram has integrated a centralized trading pool for stablecoin and TON top-ups, facilitating conversions between TON and other tokens. Functionally, this is a simplified experience nearly identical to the "instant swap" feature found on many CEXs.

This functionality is the primary feature of the Telegram Wallet. Its secondary feature is interaction with the TON blockchain via TONSpace, an experience similar to using MetaMask on PC or mobile. For token swaps, ecosystems like STON and DeDust are commonly used, but their functionality is basic, roughly analogous to Uniswap V1.

This clearly highlights TON's shortcomings in DEX development. While the Telegram Wallet handles the CEX-like experience, and TONSpace allows for on-chain interactions, the native on-chain interaction layer remains underdeveloped. Telegram's Mini Apps and Bots can also serve as trading front-ends for either DEX or CEX functionalities. While these designs optimize the user experience, the underlying, native on-chain exchange component lags behind.

Currently, DEXs like STON and DeDust only offer basic swap functions akin to Uniswap V1. As observed in the Solana analysis, for high-throughput blockchains, the priority is providing robust trading liquidity and modularizing trading functions so that liquidity advantages become the primary reason users choose a platform.

On TON, where the front-end entry point is heavily within Telegram, DEXs must increase their business sophistication—much like Jupiter and Balancer—to balance the needs of all participants: traders, token projects, liquidity providers, and platform developers. Each role requires specific, refined functionalities.

What Projects Are Enhancing DEXs on TON?

Compared to feature-rich DEXs like Uniswap, Balancer, and Jupiter, TON currently lacks projects that fully address all necessary functionalities (or they have yet to launch). However, after reviewing the designs of publicly known projects across the ecosystem, one upcoming project, a DEX middleware layer called LayerPixel, shows promise in filling these gaps for TON.

LayerPixel, incubated by the TON launchpad TonUP, is a DeFi solution suite designed for Telegram Mini Apps, described by its creators as a "Layer 1.5." It aims to provide wallet and DEX services (supporting multiple trading algorithms). Alongside its consumer-facing product, PixelSwap, it offers an embedded SDK kit for other applications to develop swap functionalities within Telegram Mini Apps.

TON needs corresponding players across the full asset lifecycle. This lifecycle includes asset issuance, asset trading, trading liquidity provision, oracles, asset pools, wallets, and more.

LayerPixel's design encompasses these components—IDO, trading, wallets, oracles, and pools—aiming to become TON's DeFi middleware and address its DEX deficiencies. Reports indicate that LayerPixel's code is complete and undergoing a security audit by two firms ahead of its mainnet launch.

Frequently Asked Questions

What is the main difference between a CEX and a DEX?
CEXs are centralized platforms that custody user funds and facilitate trades through their internal order books. DEXs are decentralized applications running on blockchains that allow users to trade directly from their wallets using pooled liquidity (like AMMs) without giving up custody of their assets. CEXs often offer faster speeds and simpler interfaces, while DEXs provide more control and transparency.

Why is TON's DEX ecosystem considered less mature?
TON's DEX ecosystem is still young. Current applications offer basic swap functionality similar to early versions of Uniswap, lacking the advanced features like concentrated liquidity, sophisticated yield strategies, integrated oracles, and robust token launch mechanisms (e.g., LBPs) that are standard on Ethereum and Solana. The heavy reliance on Telegram's built-in wallet also means the native on-chain exchange layer is less developed.

What are LBP pools, and why are they important?
Liquidity Bootstrapping Pools (LBPs) are a type of token sale using a descending-price auction mechanism. They are designed to prevent gas wars and initial price manipulation common in first-come-first-served sales. LBPs allow for more gradual and fair price discovery, often resulting in a more stable token price post-launch, which is crucial for smaller projects.

How do oracles relate to DEXs?
DEXs, particularly those with deep liquidity, generate vast amounts of real-time, on-chain price data for token pairs. This makes them natural oracles—reliable price feeds—for other DeFi applications like lending protocols and derivatives platforms, which need accurate market data to function properly.

What is the significance of modular DEX functions on high-speed chains?
On fast chains like Solana and TON, transaction times are minimal. This allows trading functions to be broken down into modules (SDKs) that can be embedded directly into other applications, like wallets or Telegram bots. Users don't need to leave their preferred app to execute trades, making the Web3 experience seamless and context-aware.

What needs to happen for TON's DEX ecosystem to grow?
Growth requires the development of more advanced DEX protocols offering features beyond basic swaps, such as advanced LP tools, fair token launch mechanisms (LBPs), and reliable oracle services. Furthermore, these services need to be easily integrable into the Telegram-centric experience through APIs and SDKs, empowering developers to build sophisticated financial products within the app.

Conclusion

After observing TON's applications, it's clear the network heavily leverages its Web2 foundation through Telegram. This design intentionally lowers the entry barrier for Telegram's massive user base. However, based on the evolution of other high-performance blockchains, Telegram's official wallet will likely evolve into more of a verification tool, assisting users with secure, direct on-chain native transactions to ensure asset safety and proper Web3 interactions.

For any public blockchain, DEXs are the venues where on-chain vitality is unleashed. The goal for every DEX is to mature into a sophisticated financial trading platform, granting users precise and mature asset management capabilities.

TON's value has been reaching new all-time highs, and its ecosystem is growing steadily. As TON continues its rapid ascent, valuable data on project performance will be reflected in DEX trading pairs. Therefore, the more mature the DEX ecosystem becomes, the greater the chance for investors to identify and capitalize on opportunities effectively. 👉 View real-time market data