Both the distributed and centralized exchanges constitute the two varieties of cryptocurrency trading exchanges. Each of these exchanges come with their own feature thereby offering different advantages and also has their shortcomings. For distributed exchanges, the advantages are evident in its functions and they include; reduction in the cost of clearing and trading, safeguarding traders’ assets, connection of people to each other are easier and more simple, and traders are permitted to join and leave the ecosystem at will. In spite of the numerous benefits, it still has its own shortcomings particularly in terms of flexibility, speed and liquidity. These shortcomings have limited the growth and acceptability of this exchange platform. Centralized exchanges has distinctive features totally different from the distributed exchanges. The merits of Centralized platform are; flexibility, matched speed and excellent liquidity. However, they have a flawed infrastructure. Each exchange exposes customers' assets to intense external and internal risks and has a complex transaction.
DAEX seeks to effectively eliminate the challenges affecting the cryptocurrency industry and lay a solid foundation to propel the growth of this industry. One of the main objectives of DAEX is the provision of a robust infrastructure for the industry by exploiting the potentials of the distributed ledger technology and utilizing the viable parts of the conventional securities trading industry. Both clearing and trading activities are further categorized into various forms. Although the functions of the existing centralized exchanges are still intact, some operations like clearing duties will be undertaken by a regular clearing service powered via DAEX system. Unlike the current centralized clearing systems, the DAEX clearing service utilizes the decentralized ledger system. Distributed ledger technology ensures that trades are tamper-proof and immutable. By using this technology, it ensures that traders' assets are stored in their personal account powered by blockchain. The traders are the only person permitted to manage their account. This eliminates mistrust or risks as evident in the current centralized system.
The rapid growth of cryptocurrency trading has necessitated the calls for a more reliable and secure cleaning service. After plethora of attacks and hack thefts, lots of exchanges have come into conclusion that a clearing service as well as an asset custodian system is required to safeguard and sustain the market. DAEX is surely the best solution to these problems. DAEX ecosystem features the clearing service facilitated by several systems and technology. For instance, wallets are used by its owners to carry out trading activities on exchanges. The trades are then matched together on exchanges for onward transmission to the clearing services. The clearing service CaaS is executed by smart contracts embedded on the distributed ledger technology. In addition, DAEX will offer clearing services for all forms of cryptocurrency used for trading activities. Participants registered on the ecosystem benefits in various ways which include; openness, trust and security.
The participants involved in the activities of the ecosystem include; the DAEX foundation, wallet users and exchanges. DAEX foundation perform some essential tasks such as; Fund management, Information revelation, Strategic decisions, Public relationship, Compliance and auditing, Arbitrage and reconciliation. The wallet users are involved in several activities such as asset delivery and trading while the exchanges ensures the constant supply of cryptocurrency and other forms of trading services to wallet users. The DAEX ecosystem integrates the two trading exchanges into a single structured system. DAEX users can enjoy the benefits offered by centralized exchanges without any fear of asset theft or loss. Furthermore, DAEX lowers the business entry and technical barriers for aspiring exchanges thereby laying a robust foundation to galvanize their growth. In the future, some activities such as derivatives clearing, smart inclusive financing and clearing for short and margin trading will incorporated into the platform.
One of the distinguishing features of DAEX ecosystem is the DAX token which helps to integrate the different parts of the system. The DAEX foundation releases DAX for the generation of fund which is used to sustain and revolutionize the DAEX platform. At the initial stage, the cryptocurrencies accepted on the platform include ETH, NEO, BTC and QTUM. The platform will soon start to issue the corresponding ERC20 coins. These cryptocurrencies will be managed by the foundation and supervised by the numerous exchanges involved. A comprehensive token repurchase program will be introduced to the platform to avoid inflation and blockage of some assets. These programs ensure that a reasonable amount of tokens is available on the market for a sustainable process. Note that the usage of funds will be strictly monitored and managed in adherence to laid-down policies. website whitepaper telegram bitcointalk ANN
Author – Coltpython
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