How to Launch a DEX like Jupiter?

Given the popularity of NFTs and digital currencies among tech enthusiasts, the number of platforms and decentralized exchanges offering peer-to-peer trade and swap services is steadily increasing to give consumers the finest features and convenience of investment.

What is DEX and how does it work?

A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. A decentralized exchange (DEX) is an exchange market that does not depend on an outsider administration (third party) to hold the customer’s funds. Rather, through an automated process, trades between users directly occur. Decentralized exchanges (unlike centralized) aren’t coordinated by one entity.

DEXs, unlike centralized exchanges, do not allow for fiat-to-crypto transfers; rather, they only trade cryptocurrency tokens for other cryptocurrency tokens. A centralized exchange (or CEX) allows you to trade fiat for crypto (and vice versa) or crypto-crypto pairs, such as some of your bitcoin for ETH. You can also make more complicated maneuvers, such as margin trades and limit orders. However, the exchange handles all of these transactions through an “order book” that defines the price for a certain cryptocurrency based on current buy and sell orders.

Decentralized exchanges, on the other hand, are simply a collection of smart contracts. They utilize algorithms to determine the prices of multiple cryptocurrencies against one another and “liquidity pools” to enable trades, in which investors lock assets in exchange for interest-like payments. DEX transactions are resolved immediately on the blockchain, whereas centralized exchange transactions are recorded in the exchange’s internal database.

There are many well-known decentralized exchanges (0x, Uniswap, PancakeSwap Curve, SushiSwap, GMX, Bancor Protocol, Kyber Network) and more that are yet to come. The decentralized exchange (DEX) ecosystem is growing in 2024, providing a wide range of options for all crypto aficionados. From Uniswap’s pioneering automated market maker methodology to PancakeSwap’s creative approach, Curve’s focus on stablecoin trading, and SushiSwap’s community-centric rewards system, the options are as diverse as the traders’ requirements.

A decentralized exchange does not require a sign-up process, and you do not even need an email address to connect with these services. Traders will instead need a wallet that supports the exchange’s smart contracts. Anyone with a smartphone and an internet connection can use the financial services provided by DEXs.

To use DEXs, the first step is to choose which network to use, as each trade will involve a transaction fee. The next step is to select a wallet that works with the chosen network and fund it with its native coin. A native token is one used to pay transaction fees in a certain network.

Wallet extensions that enable users to access their cash straight from their browsers make it simple to interact with decentralized applications (DApps) like DEXs. These are installed like any other extension, and users must either import a current wallet using a seed phrase or private key or build a new one. Password protection enhances security. These wallets may also have mobile applications so traders can use DeFi protocols on the go.

After selecting a wallet, it must be funded with the tokens required to pay for transaction fees on the specified network. These coins must be purchased on controlled exchanges and are immediately identified by the ticker symbol they employ. After purchasing the tokens, users only need to withdraw them to wallets they control.

What is Jupiter and its features?

Jupiter Exchange, which was launched in 2021, is a decentralized exchange constructed on top of the Solana Network by a unanimous developer or group of developers known under the alias “Meow.”

Jupiter directly connects all DEX markets and AMM pools no matter the provider and will find all direct and multi-hop routes between any two tokens on Solana. This means that the exchange collects the best pricing on all of Solana’s DEXs by integrating DEX marketplaces and AMM pools.

Aside from swap tokens, the exchange features a “limit order” option for trades at specific prices. Jupiter also offers decentralized perpetual and futures trading to speculate on market movements. It also includes a Dollar Collar Average (DCA), a tactic used by traders to buy or sell cryptocurrency incrementally to average out the price. Finally, it contains an in-house bridge that allows asset transfers between Solana and other blockchains. Not only does Jupiter compare the prices between markets on different DEXes but often the best-priced routes are not direct markets. Instead, Jupiter may find the best price by routing through an intermediary token.

Jupiter also automatically lists new tokens and works to optimize its swap aggregation so that it all fits with the transaction limits so that swapping can be done in one transaction. Game creators may easily integrate Jupiter swaps into their games and get cross-platform portability without changing a single line of code. Jupiter Exchange’s airdrop is confirmed by its own developers.

How to Launch a DEX like Jupiter?

Building a DEX requires knowledge of blockchain, smart contracts, and UX design. To create your own DEX, you must first grasp its architecture. A typical decentralized exchange (DEX) architecture is made up of numerous components that work together to allow for trustless and transparent peer-to-peer cryptocurrency trading.

To launch Jupiter-like DEX, here are the key components of a typical DEX architecture:

• Blockchain network

Jupiter is built on the Solana network, which is used to secure and verify all transactions and operations executed on the platform.

• Smart Contracts

Jupiter Chain’s smart contracts function as middlemen to keep data private regardless of whether entities seek data from a single data owner or a target population.

• Order Book

Jupiter Limit Order provides the easiest way to place limit orders on Solana, offering the widest selection of token pairs and leveraging all the available liquidity across the entire Solana ecosystem.

• Liquidity Providers:

Users can become Liquidity Providers (LPs) by allocating their assets or tokens into the Jupiter Liquidity Provider Pool (JLP Pool) and in return, you will get the JLP token. This APR is collected within each JLP token, whenever someone makes a trade. There is no need to “stake” or “harvest” your yield.

• Interoperability Protocol

Jupiter’s commitment to interoperability allows it to bridge the gap between various blockchain networks. This allows for easy communication and data transmission across multiple platforms, promoting the creation of a linked environment.

To create a successful decentralized exchange (DEX), you must first outline your objectives and business goals, which include the DEX’s purpose, supported cryptocurrencies, target audience, and revenue generation tactics. Utilizing services such as our Discovery Phase might help you grasp these requirements. Next, choose a blockchain network, with Ethereum being a popular choice because it supports smart contracts. Create smart contracts using languages to enable trustless transactions. Create a user-friendly interface utilizing frameworks such as Angular or React to ensure smooth interaction with the blockchain. Test smart contracts for vulnerabilities using frameworks.

Deploy tested smart contracts to the blockchain network and link the UI with a web3 provider for accessibility. Implement advanced features like liquidity pools and token swap mechanisms to improve functionality. Launch the DEX on a test network, collect user feedback, and implement any necessary changes before the mainnet launch. Finally, market and promote the DEX through multiple means to attract users and liquidity providers, investing adequate marketing money to ensure brand awareness and success.

Remember, embarking on the journey to create a decentralized exchange (DEX) demands technical expertise, strategic foresight, and adept marketing strategies. It’s common to encounter questions and uncertainties along the way, alongside a plethora of ideas waiting to be explored.