Decentralized exchanges and solutions from the ATUMchain’s team on their own blockchain.
One of the main competitive advantages of blockchain is the ability to get rid of intermediaries and eliminate centralized control. If the exchange does not exist at a particular physical point, then, in addition to directly increasing the security of the funds stored on it, it will also be less vulnerable to government control.
An exchange that exists as a decentralized network from separate nodes can be disabled only if each of these nodes is disabled. Such an exchange will be a logical step forward for the trade in cryptocurrency assets.
The ecosystem of decentralized exchanges (DEX) is still in its infancy, but some of them are already usable.
Since decentralized exchanges rely on recording transactions directly on the blockchain, the transaction speed is much lower than a centralized exchange can provide, which also leads to an increase in commissions during peak hours.
Together, these factors lead to significantly lower volumes of trade on such exchanges. However, if security is a priority, the use of decentralized exchanges is a necessary compromise.
Their interfaces are mostly clunky, and there are not yet any specialized companies or teams working on all this to provide customer support if necessary.
Having done a lot of work on analyzing the existing solutions for decentralized exchanges, ATUMchain team decided to offer its vision on the development of decentralized platforms for trade and exchange of crypto-currency assets.
But before getting acquainted with the concept and proposal of ATUMchain let’s review some of the decentralized exchanges:
Bisq is a client with a fully open source code, available for download and use in trading.
This is one of the few exchanges that allow you to trade in fiat currency, as well as various cryptoactive assets. Bisq allows you to use BTC, DASH, DOGE and LTC as base currencies for trading.
Bitshares / Openledger / Cryptobridge
The Bitshares exchange and its derivatives allow the trading of any assets tied to their own currencies (Bitshares or Bridgecoin).
Although constructively it is a decentralized site, unnecessary inconvenience in using them is the need to buy their tokens only in order to be able to perform any trading operations.
Ether Delta, working exclusively with Ethereum and based on Ethereum tokens ERC-20, recently can be considered the most famous exchange, which is associated with an increase in the number of ICO and tokens ERC-20.
It is built using smart contracts on the ETH blockchain, so it’s closer than anyone else is connected with trading on the blockchain. However, Ether Delta was the victim of the recent hacking of the DNS server, which led to a loss of funds for many users.
This is of particular concern to users: although decentralized exchanges are reliable as long as their underlying platform or smart contract is protected, hackers still have the ability to forge access points to DEX (via the user’s web browser).
The user needs extreme vigilance to make sure that he does not look at the hacked version of the website, which is not always easy to determine.
While breaking the Ether Delta, users were required to provide their secret keys a second time (this obviously had to be alarmed), not every user has the knowledge necessary to identify malicious actions.
IDEX offers a significant improvement in ease of use compared to Ether Delta and also allows trading ERC-20 and ETH tokens.
Decentralized exchanges are definitely safer than traditional centralized counterparts, but their security still depends on how cautiously the user behaves when trading.
A relatively simple additional measure is the use of self-contained wallets (paper or hardware) as another layer of security.
Such exchanges, like Ether Delta and Radar Relay, even allow you to directly link hardware wallets to a trading contract.
This setting will give the user complete and trustworthy control over their savings — from the main store to the token trading accounts — without depending on the centralized server or service.
Based on the above, consider the solution from the ATUMchain team, which needs to be said to have gone its own way, taking as a basis the blockchain of Nem and actively developing its own blockchain.
ATUMchain is a cross-chain platform for trading of cryptocurrencies. The platform is based on NEM and Tendermint features.
Moreover, the team develops its own block system, which makes this project unique in the sphere of decentralized exchanges and for cross-platform transactions.
The aim of ATUMchain is to provide transparent client-client (wallet-purse) trading without a stock of funds to the exchange.
Advantages of ATUMchain
● Direct client-client trading, counterparty risk is leveled;
● No restrictions on the volume of transactions and the need to pass KYC;
● Impossibility of the site to manipulate prices and trade against customers;
● Trade commission is 10x lower with the same speed and volume of processed transactions;
● Possibility of option trading;
Choice of the NEM blockchain platform
● NEM was conceived in 2014 to improve on earlier blockchain platforms
● Tremendous growth in popularity in the last months of 2017:
○ Dec 2017: NEM chosen by Snap Interactive as the “best-of-class” scalable blockchain
○ Used in Mijin: Hitachi, Tech Bureau, Lifull Home’s, Zaif crypto exchange.
Advantages of NEM for ATUMchain:
● Leverage proven scalability: 1,000 transactions per second, zero downtime even with a single node
● EigenTrust++ for best network security
● Low development and infrastructure costs.
● More energy efficient: Proof-of-Importance (POI) vs. Proof of Work (POW)
Considering this decision, what are the commercial advantages we get:
Spot and margin trading
ATUMchain offers brilliant opportunities for institutional investors:
● we eliminate the counterparty risk
● we provide an opportunity to expose hidden orders (icebergs)
● our commission is 10x smaller than the market average 0.1%
Using ATUMchain as a “clearing house” we can dramatically expand the crypto market due to options trading:
● we eliminate the “non-delivery risk” — options trading with 100% guarantee of execution from option seller’s viewpoint
ATUMchain as a unifying cross-chain platform that accommodates different players and blockchains.
● for institutional investors — API with a requirement of technical audit; we can act as a liquidity provider
● for retail clients — API as well as access from a mobile app. and through messengers (Telegram)
● for centralized exchanges — API with requirement of technical audit and creation of a side-chain; we can act as a liquidity provider
● for authorities- API; side-chain with administered governance.
The lack of security, transparency and efficiency in centralized services dictates strong demand for decentralized exchanges. New market participants solve these problems and try to meet the obvious needs of the community.
Experts agree that decentralized exchanges promise two main advantages: security and the global market.
The advantages of decentralized exchanges, which allow users to safely store their funds, from the security point of view seem obvious, especially against the background of ongoing break-ins. So why does not their widespread acceptance take place?
99% of crypto-currency transactions are still carried out through centralized exchanges, but in the coming years this trend should change. Switching to decentralized exchanges is necessary so that users of crypto currency can fully use their potential in a harmonious interaction with the detachments. People gradually have experience with crypto-currencies, and most technological obstacles will be overcome very soon.
The spread of decentralized exchanges is likely to be followed by a wider recognition of the airspace blockchain, an increase in the number of advanced users and some other important innovations. As mentioned above, centrally-decentralized hybrid models are likely to be the first to be distributed. Completely decentralized exchanges will become an ideal model to which the remaining projects will strive