Introducing CloudEX.app
TL;DR: CloudEX.app is Ethereum token trade platform which has an easy-to-use, traditional exchange similar UI and aims to solve liquidity issues by sharing order pools among different platforms. CloudEX EaaS(Exchange as a Service) provides a set of dApp widgets for token issuers to quickly build a fully functional exchange platform or widget that let the investors buy or sell tokens much easier.
There are dozens upon dozens of exchanges out there in the global market today, and most of them are centralized exchanges that are geared towards experienced investors and equipped with advanced trading services such as margins. Some exchanges are built from scratch, going with the “decentralized” approach. Even though decentralized exchanges have the advantages of fund self-control and the trustless nature of the blockchain over those centralized ones, the adaption of decentralized exchanges has, as of late, been limited.
Many decentralized exchanges have failed to deliver on their promises due to the lack of liquidity to operate efficiently and the not-so-straightforward trading process and bad user experience.
Introducing CloudEX.app, an Ethereum-based trading service designed to be a better user-friendly exchange that aims to solve the liquidity problem.
As a decentralized exchange, CloudEX.app has the nature of the trustless token trading on the blockchain. On CloudEX.app users can trade tokens from their own wallet with no need to deposit or withdraw their funds into the exchange. The users have 100% privacy and control over their own funds. Inspired by Paradex.io, CloudEX.app is an exchange service based on the 0x matching model protocol. Rather than a user having to wait and spot an order he/she’d like to fill, users on the CloudEX.app platform can just sign a maker order(or, as we call it, an “intend” order) and go offline, the exchange will do the rest to find the best-matching orders and settle them on the blockchain.
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For presenting a better, more user-friendly exchange, we enhanced couple features which were derived from our own experiences on the traditional stock exchanges.
First off, we support a single transaction fee calculation. Unlike many of the decentralized exchanges out there that require two types of transaction fees (one being the platform fee paid to exchange for handling the trade and one being the transaction fee (gas usage) paid to the miner to execute the smart contracts), CloudEX.app only charges a single fee which covers both the platform and the blockchain.
When placing an order, the system will calculate the “handling” fee based on the trading volume. Currently, it is 0.5% and varies on different EaaS sites (we’ll cover that later). The system charges the minimum handling fee that is required for the execution of 0x smart contracts to settle on token transfers.
Let’s say, for example, that Alice places a buy order for 100 ZRX with 1 WETH and the calculated handling fee is 1 * 0.5% = 0.005. It is bigger than the current minimum handling fee, which is set to 0.0035. So, Alice signs an order with 1.005(1 + 0.005) WETH for 100 ZRX.
Bob place a sell order with 50 ZRX for 1 WETH. The calculated fee is 0.5 * 0.5% = 0.0025 < 0.0035, then the fee is adjusted to 0.0035WETH. Bob signs an order with 50 ZRX selling for 0.5–0.0035 = 0.4965 WETH.
When those orders have been matched and settled, Alice paid 0.50025 WETH for 50 ZRX and has a remaining order for 50 ZRX. Bob sold 50 ZRX and received 0.49925 WETH from Alice.
Please note that Alice signs the buy order with extra WETH as the handling fee to trade ZRX, and Bob signs the sell order which will subtract the handling fee from the to-be-received WETH. Therefore, after the contract is fulfilled, Bob will receive slightly less WETH.
Another thing to point out is that in such a case, Alice won’t be able to cancel this half-filled order due to the unpaid handling fee. (*extra: we might be able to let Alice cancel the order because we can deduct the amount from the reclaimable fund.)
Secondly, because we charge the handling fee based on the trading volume, users don’t need to possess the platform token before placing orders. We believe that this feature will improve user experiences when using a decentralized exchange. Another reason that we don’t require users to have a particular token is because even we know that platform tokens are always used to increase the value of platform and extra trading incentives to users. We don’t see any significant benefits for a service like CloudEX.app to create a token only used for paying the transaction fee or as trading incentives. Instead, we guarantee the best and minimum transaction fee for all traders.
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To address the liquidity problem, we designed CloudEX.app Exchange as a service (EaaS) platform. CloudEX EaaS is a set of apps built to easily trade tokens from everywhere. These apps, or “dApp widgets,” can be used on websites to reveal trading statistics and execute trade commands. All of the orders that go through these widgets will be placed in a shared pool. The orders can be filled quickly and liquidity increases.
In order to encourage the distribution of dApp widgets, we are proposing a different transaction fee model applied to the orders from different widgets. When the widget order has been fulfilled, a portion of transaction fee will return to that widget owner as an incentive to help token liquidity.
We believe that CloudEX EaaS will be welcome by token issuers. Token issuers can use CloudEX EaaS to easily build their own exchange for their users to trade tokens directly on their domain. This service can help token circulation and trading without spending extremely high fees to get listed on the top exchanges. For some crypto informative sites or blogs, the widgets can generate extra revenue and improve user experience as well.
Another EaaS application scenario is digital asset exchanges. Most of these digital asset ecosystems implement specific underlying tokens. CloudEX EaaS provides white labeling a fully functional exchange for asset token swaps. This on-chain exchange ensures high security and automatic swapping without any knowledge about the underlying ETH.
We are also working on a networked liquidity protocol for CloudEX.app, which can be found on the roadmap. The protocol is designed to upgrade the CloudEX.app market pool into multiple decentralized order pools. Orders can be paired among multiple order books and sent to the blockchain for settlement, and then the handling fee can be shared as well.
Conclusion: CloudEX.app not only offers a better user experience on a decentralized exchange, but it is also a trading service that helps skilled crypto investors and newbies trade digital assets easier from everywhere in the world. We believe that CloudEX.app is the missing piece in bringing blockchain down to earth and making a real application for digital assets in the tokenized world.
Links:
CloudEX.app, https://cloudex.app
0x Project, https://0xproject.com/
