Decentralized Exchange Comparison: AMP, 0x and IDEX
2018 was a huge year for decentralized exchanges and decentralized exchange protocols. In this blog post, we will make a (biased) comparison between our newly released decentralized exchange platform and two of the biggest names in the decentralized exchange space: 0x and IDEX.
Comparing 0x with decentralized exchanges such as IDEX or AMP might seem weird at first, given that 0x is a protocol on top of which decentralized exchanges are being created. In practice however, using the 0x protocol has significant implications on the features and UX of exchanges built on top of the 0x protocol (also called ‘0x relayers’).
0x managed to create a vast ecosystem of decentralized applications and relayers working with its protocol. Broadly speaking, there are two types of exchanges using 0x: Exchanges using the open order book model and exchanges using the closed order book model.
The Open Order Book model allows exchanges to share liquidity with each other and is definitely the most decentralized DEX protocol available today. The main drawback of this model are order collisions and griefing which causes 10 to 20% of orders to fail. The Closed Order Book model allows for better UX while dropping the shared liquidity feature.
Another drawback of relying on 0x is the need to use the ZRX token when trading which greatly damages the user experience in our opinion. We also found their order/trade structure to be quite inconvenient for working with partially filled orders and decided to make several modifications in this regard.
Overall, we’re huge fans of the 0x protocol and what they have done for the decentralized exchange community but chose to go with our own protocol in order to be free to make changes and improvements rapidly.
IDEX is widely considered to be the most usable decentralized exchange today.
The best feature of IDEX is that is that it allows the user to trade ETH immediately without converting to WETH as on most decentralized exchanges.
IDEX also features a truly innovative queuing system that removes the possibility of order collision and griefing while also enabling the user to make several orders before the previous orders are confirmed.
However IDEX has the drawback of having a single point of failure. All funds are stored in one single smart-contract. Although this smart-contract is not geographically centralized, its logic is definitely centralized and funds are susceptible to be locked up indefinitely if the contract admin private key were to be hacked.
In addition to that, the deposit/withdraw model also prevents the user to keep tokens in their wallet and be used on another DApp.
Trade from your wallet
When using AMP, you can place orders and make trades from your wallet. No need for deposit and withdraws.
AMP doesn’t keep any of your funds and you can even use your tokens for another purpose while having orders placed on the AMP exchange.
Free order cancels
Similarly to IDEX you can cancel orders without making a blockchain transaction. In addition to that, you can choose to make a hard-cancel and to completely remove your order from the Ethereum chain.
We’re using WETH
Staying away from the IDEX centralized custodianship model forces you to use WETH, as well as the need to wait for ETH to convert into WETH ERC-20 tokens when getting started. This is currently our biggest usability challenge.
2019 will see stablecoins such as DAI or USDC become increasingly popular. More people will start trading from their USDC or DAI tokens which means you don’t need to convert ETH to WETH to start trading.
Order queues
AMP uses a similar trade queuing system to IDEX. In addition to prevent collisions or griefing, this queuing system allows a trader to make new trades even if his previous trades have not been confirmed yet. Since the launch of AMP one month ago, more than 99% of trades on AMP have been executed successfully and we expect this percentage to go up to more or less 100% within a few weeks.
Centralized Order Book
We use a centralized order book similar to IDEX and most 0x relayers. Both market orders and limit orders, along with partial and multiple order matches.
We currently do not support liquidity sharing with other order books as with some 0x open relayers.
Transparent Financial Data
The most powerful feature of decentralized exchanges is that you can follow the execution of all trades in a completely transparent manner and be able to track flow of tokens across addresses. We’re currently working on more visualizations integrated with Etherscan to best describe how funds are moving through the AMP exchange.
Register an ERC20 in less than a minute and start trading it immediately
By simply copy-pasting the address of your token, you can register your token on our order books and start trading it immediately.
No Protocol token
Fees are paid in the pair that is being traded.
Completely Open-Source
Most decentralized exchange platforms only open-source their contract code. This is a good first step and much more transparent than any centralized exchanges. We also open-source our client and order book server in order to mitigate vulnerabilities and increase transparency.
Proof Suite is building several web applications and decentralized applications for the Ethereum platform and for the entire cryptocurrency ecosystem.
Developer? Follow our progress on Github or reach out to david@proofsuite.com if you would like to get involved.
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