Can bitshares upend the crypto trading paradigm?
A review of the bitshares DEX platform
In the past 6 months I have become more and more enamored with the idea of decentralized exchanges (DEX). With the spectre of SEC action against exchanges for their selling of “securities” (i.e. ICO’s) we need to apply the principles of blockchain to how we trade and purchase our cryptocurrency’s. The SEC cant stop trading in tokens if theres no one to subpoena. We need to move from Napster to Limewire.
I am most familiar with bitshares as a platform than I am Komodo or Waves, however I have downloaded these platforms and will comment on them once I get a better feel for them.
Bitshares is an open source decentralized trading platform.
It has a Native software interface, but given its open source nature anyone can build on it (open ledger is the main one in the bts space now)
It’s a decentralized exchange that is built around the BTS token and has some really cool features.
Your bitshares profile will allow you trade on any bitshares based platform whether its the native application, open ledger or any future version released.
One great selling point is that your funds are not locked into the platform like they would be on say bittrex/poloniex/etc . They are held on the bts blockchain so even if tomorrow the bitshares team said "were done!", your funds are still always available.
Bitshares offers trading pairs such as bitUSD, bitsilver, bitgold, bitCNY, etc. etc. that is pegged to value of those currencies/commodities and is backed by bts as collateral at 175% the value of the currency to bts.
So if currently the price for bts/usd is 100bts/1USD there will be 175 bts locked up as collateral on the bts blockchain for every bitUSD that is created.
You can move from bitcoin or litecoin to bitUSD and back, similar wo what you would do with other exchanges; however you can view on the bts blockchain the backing these tokens have in the form of bts....AND the fees are crazily low ( i will go over those a little farther down).
the bitshares platform is highly scalable, capable of 100k transactions a second and is run by a DPOS stake model that runs a reserve pool (for community investment similar to how dash runs) where the stakeholders vote on which projects to pursue.
There is no KYC or registering of personal information IF you fund your account with crypto. IF YOU FUND WITH FIAT OR WITHDRAW IN FIAT you have to do the normal KYC stuff.
Fees are insanely cheap and based on what type of account that you open
non member, COST free
member, COST $.018 USD annual fee
member, COST $22.00 USD, one time payment locks you in for life. You get 80% reduction in trading fees and you can earn referral bonuses for other lifetime members you refer. note that this use to cost over $100 USD to get and has been reduced only recently. I have signed up as a lifetime member.
create/cancel order - .00092 BTS - $0.0001472 USD
Fill Order: Free
100k Trades per year Cost : $14.70 USD
create/cancel order - .000184 BTS - $0.00002944 USD
Fill Order: Free
100k Trades per year Cost : $2.94 USD
There are multiple other fees associated with the platform such as withdrawal, margin, etc. but they are all insanely low, that is until you start to talk about creating assets on the network (i.e. a bitLithium pegged to lithium prices ) to be traded but even then those are in the hundreds of dollar ranges.
Open ledger is probably the most popular and used platform in the bitshares dex space and offers trading in BTC/bitUSD/BTS and OBITS (the native token to open ledger) as trading pairs. you can buy ethereum, bitcoin, steem, EOS, Doge, litecoin, MAID, LISK, WAVES, DASH, OMG, and others. It doesn’t have the same swath of offerings such as bittrex but its growing. one of the neat things as well is that if you are using bitshares which through their native platform interface only trades in BTC you can access more trading pairs through other exchanges on the platform.
It has roughly 2.5 million USD daily volume vs binances 1.5 billion USD
There is community support to be found on reddit, etc., however there is no support ticket structure to submit to. that being said any of us who have ever tried to get coinbase to respond to anything know that support on centralized sites is spotty at best.
As mentioned before, can be a bit wonky at times for the non tech/crypto savvy
Limited Trading Pairs:
Cool thing is though, if you are using one of the bitshares exchange platforms and another one adds a new trading pair, you can still access it via any one of the bitshares platform. If, say you’re on bitshares you can access the other platforms, i.e. openledger as a gateway; you’ll pay a slightly higher fee than if you were buying it on openledger with openledger, but compared to coinbase/binance/kraken fees its still insanely low.
Cant be shut down by any government.
There will be no coins-e issue of the owner running off with your coins or a hacker doing a MT gox on you. As i mentioned before your assets are held on the bitshares blockchain not on an exchange account. if say the bitshare dev team and the delegates who run the network all quit tomorrow. then as long as you and another person are running the software and access the bts blockchain you can access your funds and move it off into another wallet.
If you want to pay (around a few bucks) you can, instead of a random address, login using a name (if its not taken). i.e username: BOBSBITSHARE vs Bob20dBitshares2978.
if you are a company or a trading group, you can have dynamic permission for access... so if you have a 3 man trading team, you can have your junior guy be able to actively trade but not withdraw, etc. etc.
Create your own coins on the network whether its BobCoin or a bitLithium pegged to the price of lithium, etc.
Margin Lend via loan to yourself:
For more experienced traders who are familiar with and experienced with margin trading, one of the neat things you can do is margin trade with a loan to yourself by locking up BTS assets you have as collateral. So if you think things are going up you can lock up bts, buy BTC, when it goes up sell it back to "unlock" your bts and keep the profit in BTC or whatever you traded. if you make the wrong call and it goes down you will then get margin called and you will have to put up more collateral or you will then lose it. margin trading can be risky so don't do it unless you know what you are doing, but its very cool to be able to loan to yourself.
You can suggest new features to be funded by the community. I am currently suggesting a "if/then" function to be included in the platform.
BTC BUY LIMIT: 10500
BTC STOP LOSS: 9500
BTC STOP LIMIT 11750
BTC STOP LOSS: 9000
BTC BUY LIMIT: 7500
This way your trades can be auto set based on where you think the markets will go from there and you don't need to be in the drivers seat the second you buy or SELL an asset.
Learn more and download the platform today at bitshares.org
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