We’re taking a unique treatment to solving the vormgeving challenges of decentralized Ethereum token trading. Where many designs are based on order books, we’ve determined through research and exploration that facilitating a peer-to-peer trading ecosystem will suit the blockchain best.
Spil we’ve previously outlined the limitations of decentralized order book designs, we’d like to take a closer look at why our peer-to-peer trading protocol is a superb getraind for blockchain.
What is peer-to-peer trading?
The term peer-to-peer, often P2P, is one popularized by opstopping sharing many years ago. It simply describes a pc networking architecture where every peer can act spil a server for others, and every peer has equal privileges and potency. By nature it is decentralized and supports rechtstreeks interactions inbetween individuals instead of passing communications through a central server or middleman.
Ter the trading setting, going peer-to-peer means buying and selling assets directly with each other rather than working through an intermediary or third party service. Many markets are already peer-to-peer: Foreign exchange, corporate bonds, and even penny stocks. Thesis are transactions inbetween individuals te markets that cannot be optimized by order books.
We’ve found that token trading on the blockchain cannot be optimized by order books given scalability, privacy, and fairness limitations. Ethereum, spil a decentralized, peer-to-peer computing toneel without centralized directive and control, certainly welcomes peer-to-peer trading spil a philosophical getraind. Further, spil we’ve found ter our own research and development, peer-to-peer is a excellent technical and usability getraind spil well.
To resum some of the points from our whitepaper:
Peer-to-peer is scalable
Orders are transmitted inbetween individual parties and are “one and done” spil opposed to orders on a public exchange with no ensure to fully pack. This makes cancels on an order book a regular occurrence, whereas peer-to-peer orders are likely packed because they are provided to parties that have already voiced rente. Additionally, peer-to-peer supply and request matching can be solved through lightweight peer discovery spil opposed to expensive algorithmic matchmaking–regardless of whether on or off chain.
Peer-to-peer is private
Once two parties have found and chosen to trade with each other, no third parties are required to negotiate. The communication inbetween thesis parties remains private for the duration of the negotiation, removing the chance for other parties to act on order request behavior. Only when the order is submitted to be packed will it become public skill.
Peer-to-peer is fair
Because orders are created and transmitted directly inbetween two parties, no outside participants can have an advantage. Spil long spil they are working with numerous independent parties, participants can get prices that are comparable to or better than what they would achieve on an exchange. Additionally, those pricing orders can do so aggressively without fear of being taken advantage of by automated, low-latency trading strategies.
Peer-to-peer is effortless to use
For everyday use, simply being able to browse tokens and select a seller to make a purchase is a clean interaction. Spil the role of tokens ter the Ethereum ecosystem broadens from speculation to utility, this sort of user practice will become more commonplace spil well. Check out our protocol demos to see this te act.
From protocol to ecosystem
While it began spil a thought proef, our vormgeving has developed into a protocol that wij welcome you to inspect and critique. Interchange builds on that single trade interaction inbetween a buyer and a seller to introduce fresh components that facilitate peer discovery and trade pricing. Stepping beyond the specification, our objective today is to build a peer-to-peer trading ecosystem that serves the needs of the larger crypto community and helps drive business and application development across.
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