ZigZag is a decentralised order book exchange powered by ZK-Rollups. We are launching on StarkNet as the first and only DEX and will launch on zkSync 2.0 once it goes live. Our vision is not to launch a mediocre DEX, instead, we are aiming to bring the usability of centralised exchanges to a DEX that previously was not possible. Having sufficient liquidity/order book depth is a key factor that holds back a lot of DEXs from succeeding, which is what our main aim is to get right. The support from Abracadabra is one piece of the puzzle that would make this a reality.
StarkNet is a newly established ecosystem which gives an opportunity for MIM to demonstrate their dominance in the stable coin sector. If you are unfamiliar with StarkNet, I highly recommend you to do some background reading as it is not simply another chain; it is the end-game scaling solution for Ethereum, allowing transactions to get sent with no gas and infinitely scalable speed. Think dYdX, but for a spot exchange. That is our vision.
Governance Proposal
We propose for Abracadabra to bootstrap our initial StarkNet launch with 75M unused MIM to ZigZag as market makers to maintain deep order books on a market-neutral basis for the following pairs: USDC/MIM, ETH/MIM, WBTC/MIM.
More pairs will be added later (including Curve-esque stable coin pairs) to ensure MIM keeps a dominant position on StarkNet. It seems logical for users to utilise MIM as their primary stable coin on StarkNet if it has optimal liquidity compared to any other, which is why this is mutually beneficial to both ZigZag and the Frog Nation.
At StarkNet’s launch, there will only be two stable coins on the bridges. USDC and MIM. Maker’s DAI bridge is expected to take ~2 months and by then MIM could have more utility than DAI would get since their integration was delayed. A bridge between Avalanche C-Chain and StarkNet created by AnySwap is required for this to be a success, as Squirrel mentioned to me.
Hopefully this proposal aligns with Abracadabra’s vision of a multi-chain narrative. Gaining a first-mover advantage on StarkNet is not something that should be understated; the collaboration between ZigZag and MIM can make this a reality.
Let me know any thoughts you guys have down below, looking forward to reading your comments and answering some questions people might have.
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ZigZag appear to be one of the pioneers on zksync and I think all would support MIM being used as base stable for pairs on good DEXs.
To make an informed comment on this however I think we need some more details, such as:
How does ZigZag provide liquidity as market maker? Can you share more on how the ZigZag MM model works?
What does your proposal to launch with 75m MIM actually mean - how would this be structured under what terms, and how does Abra benefit? Would the spread captured come back to Abra? How is revenue calculated and do you have revenue estimates?
The ZigZag website talks of working with other “top market makers in the crypto space”. Does this proposal include working with those centralized MM’s? What are the terms of those partnerships and how does Abra benefit?
I look forward to seeing more details on this exciting proposal! thank you
I’d like to have more details same as @dharma. All for it anyways on the principle, MIM is becoming the de-facto multichain stablecoin so every chain should be considered.
Hi Dharma, thanks for your questions. I’d be happy to answer them.
It is important to understand that we are talking for the initial launch, at which ZigZag’s MM model will revolve around market-neutral strategies; quite simple ones such as stable coin pairs maintaining $1 peg and wide arbitrage spreads instead of sophisticated HFT methods.
Launching with 75m MIM means that MIM would be the most liquid pair people can trade with. For example, people bridge over wBTC or ETH to StarkNet and are looking to swap/trade, their choice of stable coin would automatically be MIM as they’ll be quoted the best price on that. This increases further adoption for MIM throughout the StarkNet ecosystem as people will create more demand for the most used stable coin. Capturing spread and additional revenue with the 75m MIM is not our main objective, however it will come naturally.
Keep in mind that this 75m MIM is only necessary for our launch, after a while, ZigZag will become self-sustainable with its own market makers, at which point we can consider returning the 75m MIM including the revenue made as a result.
This proposal is unrelated to the market makers that are going to be operating on ZigZag, we will not be providing them with the MIM liquidity. Instead, we have a plan figured out on how to supply them with sufficient inventory that will ensure ZigZag to become one of the most liquid places to trade on. We can’t discuss which firms they are yet (but keep in mind they are going to be the best so I’m sure people can guess already).
Hopefully this answers your questions, my apologies for the delayed response!
