Dexin
Dexin is a protocol enabling the creation of on-chain structured products following automated strategies triggered by Uniswap v4 hooks.
Project Description
Currently, existing solutions enable 1) buying an index stored off-chain with strategies executed off-chain (i.e. Coinbase, Binance, E-toro) or 2) buying an index directly on-chain but with a strategy applied using off-chain triggers (i.e. Summer.fi, Sommelier, Yearn.fi)
Dexin is a protocol that allows for the creation of a structured product on-chain. It applies dynamic strategies directly from the smart contracts that comprise it. These smart contracts are triggered by the hook functionality offered by Uniswap v4 and PancakeSwap v4. This allows the protocol to operate on-chain without relying on web2 third parties.
We currently have developed one strategy, balancing 2 tokens with fixed proportions. Our first short term goal is to allow anyone to build their own index in order to let them customise their strategy by using our web app.
How it's Made
The protocol is fully coded in Solidity and is based on 3 smart contracts. Two that we have written, one that is a UniswapV4 pool.
The first smart contract represents the vault, which follows the ERC-4626 standard and is responsible for applying the investment strategy by purchasing the underlying assets of the index and tokenizing the shares of this index.
The second smart contract represents the Uniswap v4 hook. It automates actions between the vault and the liquidity pool. 1) When one asset appreciates relative to another, it triggers a rebalancing* within the vault. 2) When the pool lacks liquidity, it supplies liquidity through a minting mechanism (when buying tokens is not possible) or a burning mechanism (when selling tokens is not possible).
The third smart contract is an Uniswap v4 liquidity pool smart contract. This pool acts as a secondary market for the tokens representing the index shares.
When there is no more liquidity in the pool, the vault's smart contract becomes a liquidity provider to allow the index shares to continue trading.
We also developed a light front-end using Next.js to enable anyone to create their first product we already structured: wBTC / wETH.
*rebalancing : adjusting the allocation of the underlying assets of the index.
