Why using Shiftly? — What makes us different from a centralized exchange like ShapeShift!
Shiftly is a decentralized platform for exchanging crypto-assets in a fast, secured and affordable manner. We are able to do this by combining a state of the art UI with the 0x protocol liquidity network, composed of a growing number of relayers.
Through this post, we wish to help you understand our services and why you should trade with us.
We have witnessed a growing number of crypto-currency exchanges over the last years: Gdax, Kraken, Etherdelta, Bittrex, Binance, Coinbase, to name a few. They allowed more and more people to buy and hold the most popular crypto-currencies such as Bitcoin, Litecoin or Ethereum. These crypto-currencies can be used to buy real goods, such as food or to pay for services.
More recently, new blockchain developments have led to the emergence of a new asset class: Crypto-assets. The rising number of Decentralized applications and ICO’s resulted in the creation of thousands of new tokens.
DApp tokens are generated for the purpose of selling through an ICO to fund the product’s development but also for “fueling” operations of the DApp, reward users, etc. We now estimate the number of ethereum-based tokens to be around 70,000 (source: https://etherscan.io/tokens). After participating in some ICO’s, people have some options to trade their tokens:
- Online Peer-to-Peer trading: look for someone you wish to trade your tokens with and make a trade.
- Through an exchange offering the desired trading pair. You will need to find an exchange where you can set up an account, make a deposit, understand their often complicated UI, and make the trade.
The problems:
- Most centralized exchanges only have a few ERC20 tokens available for trading. Existing decentralized exchanges lack liquidity and do not always vet new ERC20 tokens added to their exchanges.
- Users end-up paying for deposit, transaction, withdrawal fees, which themselves vary a lot from one exchange to another.
- There are a lot of security concerns around centralized exchange. They are often victim of hacks, some of them worth hundred millions of dollars.
The solutions:
- At Shiftly, we place user experience and safety first. We will only list reputable ERC20 tokens and diligently assess any new addition.
- We will have no fees during our Beta period. We will provide an update regarding our future fee-structure in a later blog post.
- We place security first. We will allow people to trade in a totally trust-less manner without having to worry about security and hacks.
Keep your tokens safe:
You probably have heard of recent centralized exchanges hacks such as Mt.Gox ($400M), Bitfinex ($66M) or Coincheck ($500M). These are only a few examples. Even the biggest exchanges out there get hacked.
Depositing your tokens into a centralized exchange means that you give them custody of your tokens. You thereby agree to their KYC procedures, policies and security measures. In addition, people sometimes have no alternative to trade certain ERC20 tokens as they are only available to trade on certain exchanges.
Never forget that you account is not regulated by a supra-national authority. In case of a hack, you will be solely dependent on the goodwill of the exchange and on their policy with regards to security and hacks. Moreover, untrustworthy exchange owners can literally vanish with your funds.
The decentralized approach, however, mitigates this concern. Trading in a decentralized fashion using an online wallet such as metamask or your own hardware wallet removes the custody risk associated with centralized exchanges.
Shiftly Vs. Centralized exchanges: What makes us different!
We wanted to come back on what makes us different relative to Centralized exchanges.
1) Accounts, deposits & withdrawals
Unlike a centralized exchange, you do not need to create an account to start trading with us. As we are fully decentralized, trades occur through your own wallet (Metamask) or hardware (Nano Ledger). Consequently, there is no need for users to make deposits ahead of trading, nor to withdraw their tokens after a trade has been executed. Tokens are directly sent to your wallet.
There are no deposit or withdrawal fees, limits and delays.
2) Custody
One of the main advantage of decentralized exchanges is the fact that users maintain custody of their tokens. Maintaining custody of your tokens mitigates most of the risks associated with centralized exchanges:
- Hacks/withdrawal issues and delays/exchange shutdown/Etc.
3) Interoperability: Leveraging the existing protocols such as 0x and Kyber Network:
We have decided to launch our beta using the 0x protocol open order book strategy.
We are assessing the 0x network liquidity pool and ecosystem development, which has been amazing so far.We are also looking at protocols such as Kyber Network in order to guarantee liquidity to our users.
We will also work hard so that our exchange can be easily integrated with aDapps/apps and other relayers and projects with which synergies can be generated.
The relayer model designed by 0x allows us to:
- Match transactions off-chain and to settle them on-chain in a friction-less manner.
- Maintain lower transaction costs than centralized exchanges (no deposit or withdrawal fees, and much lower transaction costs).
- Offer the highest level of security through decentralization.
A lot of decentralized protocols have emerged over the last year to meet the growing demand for dencentralized exchanges. We believe that 0x his one the strongest project, both for its technical model and community of developers. We have witnessed a growing number of projects based on the 0x protocol (mainly relayers, such as Radar Relay, Paradex or ErcDex) and we have no doubt this is just the beginning!
Kyber Network’s Guaranteed Liquidity:
We are looking to integrate Kyber Network to our matching algorithm, liquidity being one of our main concern. Kyber Network is another project that we have been following actively and which also has a solid community of developers and users.
We are also looking into other protocols and new technologies that we could integrate to make our engine as efficient as possible.
Conclusion
Take back control of your crypto-assets! We aim to democratize Peer-to-Peer token trading in a totally trustless and decentralized manner. Our solution is a secured, low-friction and easy-to-use platform that let users in control at all times.
If you want to discuss further with us, or if you have any questions you can:
We are always looking for people to join our team, making partnerships with market makers, liquidity providers, crypto-funds as well as people interested in using our trading platform.
Feel free to contact us at team@Shiftly.finance!
