Here is a brief introduction/ overview of the basic architecture of our XSN Decentralized Exchange built on the Lightning⚡️ Network. In this piece, we will cover 3 main components: HUBS, Wallets, and our Aggregator/DEX API. You can also view a detailed video walkthrough of each component here.
We will begin with HUB’s aka LN routers, DEX HUBS (act as off-chain broker desks) maintain liquidity for channels to route payments and manage + match orders between peers via an orderbook. Our HUB network as a by-product will provide significant liquidity to all Lightning/off-chain networks. HUBs collect larger ROI on trading fees vs standard routing which leads to a higher incentive to lock more capital inside these off-chain nodes, especially for major trading pairs.
Liquidity can also be used to send, receive & route normal payments on all respective networks. HUB fees will be an important incentive to mitigate risks of running a highly liquid LN node. Our fees will provide a direct benefit to our coin (XSN) and network (Stakenet) through use for treasury, fee burns of XSN and when we migrate to MNs… auto-distributed as MN rewards.
Key Features of a DEX HUB
- Non-custodial cannot tamper/ steal any funds
- Route atomic swaps (true P2P exchanges) over Lightning (instant)
- Set and collect fees for the service they provide such as maintaining peers, managing orderbook, uptime, liquidity for routing, etc (Read more about the fee structure here)
XSN (Stakenet) wallet
Akin to a web browser ( a portal into the internet), the wallet acts as a portal into our lightning (DEX). It is maintained by a dedicated team to ensure top performance and ease of access to the networks behind it. The wallet is meant to give users the ability to not only sending and receiving but staking, exchanging, voting (governance), and much more all while the user maintaining their keys at all times. Our built-in Auto-Updater feature allows you to stay up to speed with the latest fixes and features with just a click of a button.
Lightning Network is the first advanced feature to be supported in the wallet. It is made easy with features like Auto-Pilot and Channel Rentals (automatically set up your channels for you to the HUBs) + the functionality of P2P atomic swaps over Lightning ( Decentralized Exchange). You can also manually set up your channels to anywhere else like Bitfinex for example, so you can move your assets around at ⚡️ speed.
Aggregators / DEX API
Automated trading systems are responsible for a majority of volume on all successful exchange platforms, these strategies however need near-instant settlement times to function correctly and be profitable. As our DEX is one of the first-ever to settle near-instant ( done via Lightning Network) it allows for these systems to have a means of onboarding their liquidity. We see this as a benefit not just to our DEX but to all DEX’s as it gives a clear path to cross liquidity from Central → Decentralized exchanges.
Using our public DEX API developers have all the tools to setup
- Automated trading systems
- Market makers
- Arbitrage bots + more
Watch a video of our Aggregator tech at work connected to Binance:
Why the XSN blockchain?
Once the DEX HUB architecture is proven stable, liquid, and scalable to high volumes we will plan the migration of the HUB network to XSN HYDRA nodes (nodes run on top of the Stakenet blockchain) for a global unstoppable network.
Using the blockchain we can enforce fees generated from the DEX to be distributed to the HYDRA network, increasing rewards for what currently are known as XSN Masternodes (all Masternodes will be converted to HYDRA nodes at stage 3 in the infographic below).
The benefits HYDRA would provide to the DEX network are redundancy, uptime, and liquidity. All nodes would be glued together and connected via layer 1 of the XSN blockchain, regulated by its system of governance.