What is Cardax

​Cardax is a decentralized exchange powered by the EAMM protocol. It aims to provide liquidity to projects that issue native tokens on Cardano.

Why Cardax

The Mary hard fork (done on March 1st 2021) allowed anyone to build native assets on Cardano. Native tokens will bring multi-asset support to Cardano, allowing users to create uniquely defined (custom) tokens and carry out transactions with them directly on the Cardano blockchain.
This, together with the upcoming release of Goguen (smart contracts on Plutus), will allow teams to build decentralized applications on Cardano. It will also allow projects that already exist on Ethereum to start migrating to Cardano.
This is, of course, great news but it also presents a new challenge since there is currently no decentralized exchange (DEX) on Cardano. So tokens built on the Cardano network don't have a 'native exchange' to list yet.
Cardax aims to be that 'native exchange' for the Cardano ecosystem.

What makes Cardax different to other DEXs like Uniswap, IDEX or Sushiswap

Decentralized Exchanges (DEX), in order to provide a market price, usually rely on one of the following systems: Order Book or Automated Market Maker (AMM).
So, which one is better? Our team has been researching the different systems for a few months and came to the following conclusion: it depends on the kind of tokens you want to serve on the exchange.
The Order Book model works best when the exchange offers trading pairs that have high liquidity (e.g. BTC/ETH, ADA/USDT, BTC/BUSD). The majority of centralized exchanges use Order Books, including the biggest ones such as Binance, Bittrex or Coinbase. IDEX, a decentralize exchange for ERC-20 tokens, uses the order book model.
However, if a market is illiquid, order books don't work that well. You can make an order, but finding a match for it won't be as easy, and you'll have to wait a long time. This often means you will not be able to escape volatility and large spreads occurring in these situations.
Switcheo is an example of an order book style DEX. After 4 years of launching it has only 7 BTC in daily volume. It is a bad experience for users who want to trade their assets. Because of the low liquidity users have to wait a long time, sometimes weeks, for an order to be completed. That is if the order can be completed at all. Many times orders stay just open without having been able to find a counterparty to trade with.
An Automated Market Maker model (this is the type that Uniswap uses), on the other hand, suits better if the exchange offers mainly pairs with low liquidity. The main advantage of an AMM system is that there will always be liquidity for otherwise illiquid markets — at least while there are enough people to invest in a liquidity pool.
However, what if there isn’t enough liquidity around the desired price to fill a large market order? There could be a big difference between the price that you expect your order to fill and the price that it fills at. This difference is called slippage. This, together with impermanent loss are the main disadvantages of an AMM system.
Projects that issue their own token come to a DEX to find liquidity. Although a AMM system allows them to create a new pair (Bobtoken/ADA), it also means they need to have a enough capital in order to create a liquidity pool that is liqwid enough so that they don't end up with a high slippage if a large order is executed. So, the bigger the collateral, the more liquid the pool becomes and lower slippage happens when bigger orders are executed. This is a problem, because many new projects that will launch their own native tokenon Cardano will be rather small and therefore won't have a lot of capital upfront.
Also, AMM markets act as uninformed, as the price is set by a pricing algorithm rather than an order book. Read more about it on this article.
So, is there a way to get the best of the two worlds? Could we have a system that:
  1. 1.
    Allows anyone to become a market maker by either starting a liquidity pool or participating in an existing one.
  2. 2.
    Minimizes slippage
  3. 3.
    Minimizes the risk of impermanent loss
  4. 4.
    Provides more price transparency
  5. 5.
    Allows token issuers to create a new pair without the need of big a amount of capital to serve as collateral.

The Extended Automated Market Maker (EAMM) protocol

We are currently working on the protocol. This section will be updated as soon as we finish the work related to this task.


Add support for any Cardano native token
Join liquidity pools to collect fees on ADA-Cardano Native Tokens pairs
Liquidity-sensitive automated pricing using EAMM protocol
Trade ADA for any Cardano Native Token
Trade any Cardano Native Token for any Cardano Native Token in a single transaction
Trade and transfer to a different address in a single transaction
Buy ADA or any Cardano Native Token from Yoroi wallet