The demand for Bitcoin has been steadily rising which is being driven by its growing mainstream adoption and the appeal of its decentralized nature. The emergence of Decentralized Exchanges (DEXs) and stablecoins gave hope to investors and changed the way users can acquire Bitcoin offering a more accessible approach.
DEXs, however, for years faced challenges when it came to purchasing bitcoin using a stablecoin on any network. While stablecoins have emerged as an integral part of the cryptocurrency ecosystem, providing a stable medium of exchange, the lack of direct trading pairs between Bitcoin and stablecoins on most platforms poses a significant challenge.
The absence of an interoperable platform with sufficient liquidity to support direct conversions between Bitcoin and stablecoins on any network remained a limitation for a long time until came ChaiDEX.
ChaiDEX boasts a much faster transaction time and lower fees compared to traditional exchanges. It also supports EVM chains, Solana and Bitcoin allowing users to swap assets between chains such as SOL-BTC or ETH-SOL. The DEX has innovated with local stablecoins available in five regions: India, Vietnam, Oman, Nigeria, and the Philippines. These stablecoins, such as the INRC in India, are pegged 1:1 to their respective fiat currencies and backed by USD-pegged stablecoins like USDT/USDC.
ChaiDEX sets itself apart by offering interoperability across multiple blockchain networks, making it simple to purchase Bitcoin with any stablecoin on any network.
In addition to these local stablecoins, ChaiDEX also offers CHAIT, which serves as the utility token of the platform. CHAIT is used primarily for governance and accessing specific features on the ChaiDEX platform rather than just financial stability goals done by other stablecoins.
These stablecoins serve as a reliable and efficient medium of exchange, enabling users to acquire Bitcoin without the volatility typically associated with other cryptocurrencies.
To purchase Bitcoin using a stablecoin users typically needed to follow a multi-step process involving centralized exchanges, wallet transfers and DEX trading. This process can be cumbersome and may incur additional fees and transaction times compared to direct trading pairs. Let’s get a better understanding of some of the other challenges faced by users while purchasing a Bitcoin on a DEX.
Challenges Faced by Users while Purchasing Bitcoin via Stablecoin on DEXs?
Buying Bitcoin directly from any stablecoin on any network involves a few complexities and limitations some of which are:-
Network Compatibility
Bitcoin operates on its own blockchain which is different from where most stablecoins are issued and the lack of local stablecoins in each country adds to the problems of compatability. For instance, popular stablecoins like USDT and USDC are predominantly issued on Ethereum, Tron, and other blockchains. To exchange these stablecoins directly for Bitcoin, there needs to be a bridge or mechanism that facilitates the cross-chain transaction, which adds complexity.
Liquidity and Exchange Support
Not all exchanges support direct trading pairs between Bitcoin and every stablecoin across all networks. This limitation is often due to liquidity issues—exchanges tend to support trading pairs that have enough user demand and trading volume to ensure smooth market operations.
Regulatory and Security Concerns
Cross-chain operations, especially those involving different assets like Bitcoin and various stablecoins pose regulatory and security challenges.
Technological Infrastructure
The technology required to facilitate seamless and secure cross-chain transactions is still evolving. Solutions like wrapped tokens (e.g.Wrapped Bitcoin on Ethereum) and decentralized bridges are in development, but they come with their own risks and limitations.
Up until now to buy Bitcoin using a stablecoin from a specific network one typically has to rely on centralized or decentralized exchanges that support such transactions or use intermediary currencies or services to facilitate the exchange.
ChaiDEX: Purchase Bitcoin via Any Stablecoin on Any Network
Purchasing Bitcoin on ChaiDEX offers several advantages, including its non-custodial nature which ensures you retain control over your funds. The platform supports direct token trading without needing wrapped tokens, or token bridging solutions. Apart from these basic benefits of a hybrid DEX some reasons that make ChaiDEX your primary contender for in the DeFi world are:-
Lower Transaction Fees
When compared to the inefficiencies of traditional DEX aggregators, ChaiDEX addresses the issue of high trading costs which arises from complex routing paths to buy BTC (for example.) Manually checking multiple DEXs for the best prices can be tedious and inefficient, leading to higher overall costs for traders.
ChaiDEX charges a low transaction fee of 0.1% and distributes 50% of the returns to stakers. Moreover, ChaiDEX has the remaining 50% allocated to a buyback and burn program creating token stability.
Interoperability
ChaiDEX stands out not just for its broad support across multiple blockchain networks but also for enabling the first-ever cross-chain transfers without the need for bridging solutions. This capability allows for seamless and direct transactions between different blockchains.
ChaiDEX utilizes a staking mechanism that involves depositing stablecoins into a secure pool to accumulate rewards and mint local stablecoins.
Presently, ChaiDEX supports transactions across 11 different chains and will be supporting many more, enabling exchanges between a variety of cryptocurrencies (for example BTC – SOL)
DeFi’s true potential lies in democratizing finance and creating a borderless financial ecosystem.
Our vision is to shape a future where blockchain isn’t just a platform for innovation, but a cornerstone for ethical and equitable practices across industries.
Jaydip Rathod, Founder, ChaiDEX
Faster Transactions
ChaiDEX utilizes Atomic Swap technology to power its transactions, eliminating the need for intermediaries or “hoppers” that can cause delays.
Atomic Swaps enables ChaiDEX to facilitate transactions across different blockchain networks. This means that users can trade assets native to one blockchain (e.g., Bitcoin on the Bitcoin blockchain) for assets native to another blockchain (e.g., Ethereum on the Ethereum blockchain) without the need for token bridges or wrapping.
Localised Stablecoins
ChaiDEX has hit it for a homerun with its local stablecoins pegged 1:1 against their local currencies, currently available in five regions, India, Vietnam, Oman, Nigeria and the Philipines. These local stablecoins are backed by USDC and USDT and not the local currencies because of regulatory issues. These local stablecoins provide users with the freedom to buy or sell them quickly and with minimal fees, as they are not subject to pricing or liquidity constraints.
Overall, these local stablecoins are designed to be a stable and reliable way to store and transfer value. They are free from pricing or liquidity constraints and they are always backed by real value.ChaiDEX V0.2 supports EVM chains, Solana, and Bitcoin, allowing users to easily swap assets between chains such as SOL-BTC or ETH-SOL.
In order to make sure that these stablecoins are reliable, ChaiDEX maintains a reserve of USD-pegged stablecoins which are equal or greater to the number of stablecoins in circulation. Doing this the and allowing everyone to verify that they have the reserves, the DEX ensures a transparent proof-of-reserves process.
Conclusion – How to Purchase Bitcoin on DEX
Buying Bitcoin with a stablecoin on a DEX was a challenge. Network incompatibility between Bitcoin and most stablecoins forced users through complex cross-chain transactions or exchanges with limited pairs. This resulted in slow speeds, high fees and security concerns.
ChaiDEX reduces this complexity. It acts as a network-agnostic DEX, allowing Bitcoin purchases with any stablecoin on any network. Through atomic swaps and a strong staking mechanism, ChaiDEX offers faster transactions, lower fees and increased security. This innovative approach positions ChaiDEX as the only DEX where users can purchase a Bitcoin on any network via any stablecoin.
