DAEX: Digital Assets Exchange Review

sammy-gates (44)in #blockchain • 6 years ago

The creation of cryptocurrencies brought relief to many, as people saw a more efficient way to transact business without having to go through all the hassles of using the traditional banking system. Cryptocurrencies, though without mainstream adoption has continued to thrive in the financial technology industry, but, there rises several challenges plaguing both the centralized and the decentralized exchanges, and these challenges have continued to be a drag on the advancement of crypto and crypto exchanges. One of the major problems with centralized exchanges is that despite their high liquidity rates, and speed, the exchanges are usually in charge of holding the traders’ funds, and that strips the traders of full control over their funds, furthermore, it is risky for the traders, as a shutdown of the centralized exchange could lead to the traders losing their funds. On the part of decentralized exchanges, traders transact on a Peer-to-Peer level without the interference of a 3rd party as in the case of centralized exchanges, hence, traders are in total control of their digital assets, and as such have full security over the said digital assets.

Despite its seemingly advantageous position over centralized exchanges, decentralized exchanges suffer from extended transaction times, and challenges with low/weak liquidity. In light of these challenges plaguing the crypto exchange community, a company seeks to solve the issues with an initiative aimed at combining the strong features of both the centralized and decentralized, to create a hybrid crypto exchange.

The Hybrid Exchange with DAEX

DAEX is a blockchain based cryptocurrency exchange architecture that combines the features of the centralized and decentralized crypto exchanges for a hybrid exchange that will provide users with a platform that will have enhanced security features, faster transaction times, an environment that is trustless, and strong/high liquidity. DAEX intends to facilitate the effective functionality of the exchange by ensuring that the trading and clearing services are separated into dissimilar entities, and this invariably means that if the DAEX protocol is applied to centralized exchanges, trading services will continue as usual, however, the settlement and clearing services will get handled by DAEX. Furthermore, another assurance from DAEX is that digital assets owned by the traders will be kept by the traders themselves, and not on the centralized exchange. At the end of it all, traders will be able to enjoy the major benefits of centralized exchanges- (fast, and seamless trading) and those of decentralized exchanges (security and complete control over digital assets).

DAEX Ecosystem

DAEX will be able to achieve the feat with the aid of some important technologies including the clearing chain which functions as a link between the centralized exchanges, the DAEX community, and the end users. The clearing chain will be used to make settlement and clearing services available for both institutional and individual users. Every user of the DAEX platform will get a clearing account where digital assets will be registered, asset balances can be monitored, and transaction history can be viewed. Furthermore, every trading asset will be managed on the same ledger which has transparency as a core feature. Another feature of the DAEX protocol is that it comes with a decentralized wallet that allows users transact with different types of digital currencies including ETH, BTC, NEO, Qtum, and every other Ethereum ERC-20 based token. The DAEX ecosystem will function with the aid of the DAEX tokens, which will be used to facilitate rewards, hence, anyone who contributes to the functionality of the DAEX ecosystem will receive DAEX tokens as rewards for their contributions, and the DAEX tokens are Ethereum ERC-20 tokens.