Decentralised exchanges are on the rise and as more and more sophisticated platforms are rolled out, there’s every reason to believe the future of crypto trading will be led by decentralised exchanges aka DEX(s). Leveraging the security that comes with decentralisation, DEXs offer a far superior trading environment protected against the vulnerabilities that centralised exchanges are faced with. In fact, since blockchains are built on the founding principles of security, transparency, public accessibility and decentralisation, it makes perfect sense that the trading exchanges of the future are also based on those same principles.
As new DEXs are rolled out and older ones get a long overdue UX makeover, it’s time for a review of the primary blockchains that are supporting the rise of the DEX market.
The Bitshares blockchain was founded by Dan Larimer, who also co-founded Steemit and EOS. It is a decentralised financial platform that provides high-performance asset exchange for several cryptocurrencies. Bitshares has a utility token called BTS which functions as a native medium of exchange within the ecosystem and can also be used for sophisticated trading features such as margin trading. The exchange boasts handling 3300 tps today, with the potential to scale to 100,000 tps in the future.
One of the key features of the Bitshares ecosystem is the ability to create reliable stable coins, or fiat-pegged cryptocurrencies. Anyone can create cryptocurrencies pegged to the value of another asset such as the US Dollar, Chinese Renminbi or even gold. As a group these are called BitAssets. The token used for backing up pegged cryptos is the native BTS token and as a rule, a pegged crypto like BitUSD is backed up by 200% worth of BTS in collateral, recorded in the decentralised Blockchain. The ability to create multiple fiat pegged cryptos is critical to our mission of delivering a far better remittance option that covers every remittance corridor and currency pairing.
Sparkdex on the Bitshares blockchain
The Sparkdex is a decentralised exchange portal which runs on the Bitshares blockchain. Launched on 30 August 2018, it was Hong Kong’s first portal connected to Bitshares, offering a BTC and ETH gateway to the world’s leading decentralised exchange. Building on the features of the Bitshares blockchain, the Sparkdex was purpose built for trading fiat pegged cryptocurrencies.
We believe decentralised exchanges should be easy to use and accessible to everyone so that they contribute to increasing financial inclusion worldwide. To achieve that, users on the Sparkdex own their own funds, trade peer-to-peer at flat 0.2% trading fees, withdraw or deposit without limits, and do not need to submit any documentation for identity verification.
Ethereum is best known as a blockchain platform for the development of dApps and creation of custom ERC20 tokens. Over the past few years, many DEXs have been launched based on the Ethereum blockchain such as IDEX, Bancor, 0X, Kyber Network and EtherDelta. Some of those exchanges enable trades for any ERC20 token without the need for official listing, which makes it a great way for newly minted Ethereum based tokens to gain market share after their ICO, if they’re having troubled getting listed on other exchanges.
However, despite its positive reputation as a platform for development, the network faces a number of structural challenges. Most notably the network’s scalability issues severely limit the rate of transactions — currently around 15 tps — which prevents it from reaching the levels required by a vast crypto trading industry where slower transactions can mean lower profits. Additionally, transaction costs which are calculated in Gas and paid for in ETH, are only increasing making Ethereum based DEXs more and more expensive. But if the network is too congested, a user always has the option to pay more for a speedy transaction confirmation.
Currently, there are several exchanges connected to the Stellar blockchain such as StellarTerm, StellarPort and Stronghold. These are not run by Stellar itself and are separate projects that interact with the Stellar network using the Horizon API. But as stated in the company’s roadmap, that’s all about to change in 2018 with Stellar’s own decentralised exchange, the SDEX.
The SDEX will serve as the front-end to their underlying technology and will store the order book on-chain, settle transactions on-chain, and has matchmaking built into the protocol for any Stellar token. According to the roadmap, the exchange enables Day One trading for any Stellar-based token and atomic pathfinding to discover the lowest rates between any two assets. The SDEX is geared towards the ICO market with Mobius as one of the first major token sales to take place on Stellar, accepting Lumens (XLM) for their MOBI token.
Waves is a platform built for token creation, and has a decentralised exchange component for asset transfers. While Ethereum has global reach, the Waves platform has performed particularly well in the Russian ICO market, where its team is based. Similar to NEO being referred to as the Chinese Ethereum, Waves could be considered the Russian version. But since their partnership with Deloitte in 2017.
The Waves blockchain prizes itself on making it quick and simple to create new tokens to help businesses enter into the crypto market and fund their growth through ICOs. The Leased Point of Stake (LPoS) feature on the DEX offers traders a sophisticated way to earn a regular return on Waves tokens. Essentially, it enables a user to lend Waves tokens to a node, in return for a scheduled pay out.
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Bitspark is a bankless money transfer ecosystem that enables businesses and people to cash in and cash out cryptocurrencies across Asia and Africa.