(not complete)

What is a decentralised exchange (DEX)?

Introduction

Categories of decentralised exchanges

Background Story

The demand in cryptocurrency market has immensely increased recently. From 2015 to 2017, daily trading volume sky rocketed from $60M to $8 Billion! (a 13233.33% increase).

Despite this, there has been a big gap in the market on meeting trading demands. Most of trading currencies occur in centralized exchange where control of funds are not in the hands of the users. Funds are at risk to hacking and mis-management of exchanges. On top of that, only hand picked ICOs coins are listed on these exchanges.

EtherDelta

• Switcheo runs under the neo platform while EtherDelta runs on ethereum
• NEO uses Byzantine Fault Tolerance (dBFT) as a consensus which is different from Ethereum
• dBFT allows a bigger transaction output (10,000 tps) which would improve efficiency of Switcheo
• NEO blockchain has less fees than ethereum
• Switcheo are able to fill multiple orders
• Switcheo only trades with NEP-5 tokens initially

Switcheo

A decentralized Exchange under the NEO platform

• provides trading through peer-to-peer settlement
• provides an immediate trading (as soon as ICO ends) for NEP-5 tokens
• provides an entire on-chain trading
• secured funds- giving the full control to the user

Architechture

Includes four key components:

Front facing user interface (UI)

Features:
● Market buy/sell
● Limit buy/sell
● Login through JSON Wallet, WIF, Private Key, Ledger
● Client-side matching and filling multiple offers within a single offer
● Automatic retry of failed fills
● Personal transaction history
● Trading charts (via tradingview)

Custom blockchain nodes

• logs smart contract events and interactions
• events are stored for auxiliary information (trading history, charts) to improve user experience

Off-chain order history database and API

• Developed an API that allows retrieval of data about order transactions
• API will be in easy-to -use JSON format
• Order book will be on chain so clients can query directly
• Off chain mainly used for efficiency query

Broker smart contract

• Core engine
• Handles asset swaps, deposits, and withdrawal of assets

Problems They Solve

Security

• aims to provide a full on chain trading whilst having the security of a decentralized exchange
• aims to run a bug bounty campaign to minimise bugs on the smart contracts

Control

• Switcheo only does trade settlements in their smart contracts, full control will be given to the user so no funds will be loss due to hacking.

Immediate Listing

• uses Dynamic call functionality technology, users are able to list and buy tokens (NEP-5) as soon as ICO has finished

Exchange Fees

• A guaranteed cap of 0.5% for the maker and taker fee

User Experience

• allows for partial filling ​of offers, auto-retrying​ of failed orders, and order batching​ within a single transaction

Liquidity

• Switcheo aims to tackle low liquidity through strong credibility and better user experience

NEX

• Both are DEX under the NEO platform
• NEX hard cap is $25 M (3 x compared to switcheo)
• NEX token holders share the fees generated by the exchange - there is some implications that it will be a security token and might have some legal implications and difficulty in getting listed in other exchanges
• Switcheo is a utility token with discounted fees
• Switcheo trading happens entirely on chain (order book is onchain), no off chain matching like in NEX
• Switcheo released has already released a prototype live in their site (working product is still pending for NEX)