How to bring liquidity to decentralized exchanges: MoveToken + DEX
In 2017 we started exploring the concept of inter-blockchain and the ability for tokens to “move” between different blockchains to take advantage of advanced network speed and transaction costs on Ethereum or EOS. It is worth remembering that the bulk of transaction value in cryptocurrency constituted mainly of Bitcoins and related UTXOs. You may have noticed that we specified transaction value as opposed to transaction volume. Bitcoin still represented the highest value coin, while Ethereum and other coins were gaining momentum in terms of transaction volume and value.
Blockchains are similar to relatively closed ecosystems with rules and constraints governing their behavior. Transaction validation protocols are clearly defined and determine transaction processing time, as in the case with Bitcoin or Ethereum. As such, specific blockchains are “faster” than others in treating transactions and also less expensive. The inter-blockchain concept, in its purest expression, was an attempt at solving the transaction processing issues inherent to Bitcoin, for instance. Bitcoin represents the single largest cryptocurrency market capitalization at $164B (Jan 2019) or 66% of all the coin value but remains plagued with slow transactions and relatively high transaction costs as compared with third-generation networks such as EOS or Stellar.
The second challenge with Bitcoins is that decentralized or peer-to-peer exchanges cannot support Bitcoin, Litecoin, or Bitcoincash transactions. Hence safe non-custodial trading is not available for such coins and limits the value and volume of transactions possible on decentralized exchanges. The inherent risks to custodial trading represent a real challenge in terms of liquidity and trading volume. It is similar to a forex market where US dollars could not be traded against other currencies.
The honeypot problem
We all read the headlines about hackers stealing from exchanges: “…..$1.8B stolen from centralized custodian exchanges in 2019; exchanges hacked with hundreds of millions in coins stolen…”. When we read stories of exchanges hacked, we can imagine a discussion (more like an interrogation)between a police officer and a bank robber where the cop asks why the bank robber; steals from banks and the thief to answer candidly: “..because that’s where the money is!”. Centralized custodian exchanges are the equivalent of banks with considerable coin reserves held for clients and providing liquidity to traders. Why blame hackers since where there is a “honeypot,” there will always be someone to try to steal it. Or in other words, hackers’ efforts are proportional to the size of the gain from hacking, and centralized exchanges represent sizable gains for them.
So how do we solve this problem and make trading safer? Traders have had an alternative to centralized exchanges for a few years now with decentralized peer-to-peer exchanges(DEX). In this scenario, any user can exchange coins using their wallet without having to trust an exchange with custody of their coins. Traders will tell you the problem with DEX has been with liquidity and the ability to find sufficient buyers and sellers. DEX are mostly limited to trading altcoins, which have minimal liquidity and price momentum, given the inability of most to provide a service of some value. DEX are also limited to the Ethereum network to operate hence restricting access for UTXO coins such as Bitcoin, Litecoin, etc.
The problem: providing sufficient liquidity on DEX to create a market where traders will buy and sell efficiently.
The solution: Bringing liquidity associated with Bitcoin, Litecoin, Bitcoincash onto DEX through our MoveToken Application.
At Transledger, we have devised a solution that allows users to trade Bitcoins on decentralized exchanges. The MoveToken application will enable traders to first transfer a token or coin(BTC, BCH, LTC, ETH, XLM, XRP, TLOS, EOS, WBL) onto one of four blockchain networks(Ethereum, Stellar, EOS, TELOS) to bring a BTC onto the EOS network and back to the Bitcoin network for instance. Once a bitcoin has been brought onto the EOS network, it can then be traded peer-to-peer without risk on the Transledger decentralized exchange or any decentralized exchange.
We solve the liquidity problem associated with custodial exchanges by bringing value coins onto peer-to-peer exchanges.
Transledger is the swiss-army knife for cryptocurrencies
The integration of the MoveToken application with the decentralized exchange to bring liquidity is only one of the innovations from Transledger. We offer a unified platform with a comprehensive onboarding system (KYC and AML compliant), a wallet/account management application to transfer funds between members, and a Payment system to send and receive payments in nine cryptocurrencies. The Transledger platform is as versatile as a swiss-army knife while offering:
- a cloud wallet supporting multiple cryptocurrencies,
- a payment/fund transfer solution for free transfers between members
- a Peer-to-Peer decentralized exchange available on four networks
- a MoveToke application, a first in the industry bringing liquidity from Bitcoin, Bitcoincash and, Litecoin to trade safely peer-to-peer.
- A token issuance and management system on four networks
Innovation at every corner
We are introducing multiple innovations to the world of blockchains. Our Membership application enables clients to build their community while providing KYC and AML functionalities for full compliance with regulators. Members from communities can then send and receive funds with a single email address: no need for cumbersome keys.
We are also innovating with our MoveToken application, enabling fund transfer between blockchains bringing liquidity to faster and less costly networks such as EOS, TELOS, Worbli, or Stellar.
Join the Transledger Open Community
We invite you to create an account through our SignUp page simply. By creating an account, you will also test our Membership application and its verification process. You will then be part of a unique community transferring funds and moving token between networks.
Contact us for tech questions:
didiermartin@transledger.io
If you would like to explore options, ask questions, or start, please reach out to our team at info@transledger.io or come to our Telegram channel
