Two essential modules of the protocol, the dark oracle and broker module, are currently deployed on the multiplexing layer. These two modules are used to achieve zero price impact trading, universal liquidity and liquidity multiplexing. While most MUX protocol components are decentralized, the multiplexing layer infrastructures are currently off-chain.
Balancing decentralization and product performance have been in continuous exploration during the development of MUX; the protocol needs to minimize trust in all aspects, but it also faces limitations from on-chain infrastructures. For example, existing on-chain oracles capture index prices at a relatively low frequency, leading to room for toxic arbitrage and lower pricing accuracy for margin trading. Also, no existing decentralized infrastructures provide a convenient interface for application protocol (like MUX) to effectively monitor and manipulate liquidity across chains. To achieve needed critical features, the MUX team built the multiplexing layer infrastructures from scratch and planned to decentralize them progressively.
After the protocol reaches a stable and self-sufficient state, we’ll start to decentralize the multiplexing layer. Depending on third-party infrastructure capabilities, the multiplexing layer can be decentralized in two directions.
- 1.If third-party decentralized infrastructures are improved and start to meet the performance requirements from MUX, the team will shift to using these decentralized services.
- 2.Suppose third-party decentralized infrastructures can’t meet the performance requirements in the foreseeable future. In that case, the team will start to devise a light-weight decentralized network, which is governed and operated by veMUX holders, to provide the oracle and broker services.