Decentralized Exchange, Cross-chain Trading

22 Sep 2020

• Serum DEX (Decentralized Exchange) is built on the platform of Solana and sponsored by FTX
• Cross-chain Swaps: A solution to help users trade between tokens of different platforms (like ETH and SOL) easily.
• SRM: Token of the project, used to reduce trading fees, loan appraisal as well as operating the system.
• BTC and USD versions are pegged to the Serum (for example, SBTC token – similar to USDT backed by USD, SBTC is backed by BTC).

I. Overview

Conducting IEO on the FTX exchange, SERUM is a hot DeFi project in recent times, mainly for the following 2 reasons:

First, SERUM was the FIRST DeFi project to have an IEO. Most of the recent hot DeFis are available for sale in advance, but most Vietnamese users cannot participate. It is only when the coin is pumped a few times that people can access it. That's why the SERUM is so hot.

Secondly, SERUM is sponsored by FTX - a leading exchange in the period of 2019 - 2020. In addition, SERUM is also run on the Blockchain of Solana (SOL), which is one of the trending projects recently, with the ambition of being the "ETH killer”.

II. What problems does Serum solve?

• Centralized: Most DeFi projects today are dependent on a centralized oracle to provide data. The simplest example is Chainlink's oracle.
• Slow & Expensive: Transactions currently on DeFi take a few minutes (5-10 minutes) to complete. Besides, the transaction fees are also very expensive. During peak times, it can increase up to $100. This frustrates most users who want transactions to be fast and cheap.
• Orderbooks: Currently the DeFi market uses an automated market making system (AMM) that allows users to trade without placing orders, everything will be automatic. However, this will not benefit users if the market is volatile, they need limit orders to protect assets.
• Stablecoins: Stablecoins are all built on a value of 1 USD. However, if the bank that issued the USD fails, how will the value of that stablecoin be determined?
• Cross-chain: The crypto market at this time does not have a project that completely solves the problem of connecting blockchain gateways together, 3rd parties are still needed.

In short, Serum promises to bring solutions to many of the problems that decentralized exchanges are facing. Serum will have speed from SOL, orderbook solutions from FTX (FTX is the team behind that backup for Serum), and have lending and borrowing features like DeFi.

With the use of SRM tokens to reduce fees, as well as regular coin burning, many users expect SRM tokens of the project to grow significantly.

III. Market Size

By solving many problems of DeFi, Serum will have the opportunity to capture $8.29 billion worth of market share. But to do that, Serum must have a strategy to compete with its rivals.