STEEM Decentralized Exchange - The Sky Is The Limit Now

in #smt7 years ago (edited)

dex.png

Introduction

I'm still going through the whitepaper and pondering the implication/application of this new technology on the STEEM blockchain. My goal is to simplify for you what it is, what it means and how it's going to make a difference for you on the long run.

Today, I'm going to be talking about the decentralized exchange aspect of the SMT whitepaper.

More than Social Media

steem dex.jpeg

A lot of people are on steemit.com because of the social media aspect of the STEEM blockchain. In fact, a lot of new comers get confused because people have a hard time separating the two. Steemit.com is the website while STEEM blockchain is the technology that enables it.

SMTs introduce a new aspect to the STEEM blockchain: tokens

Tokens will be used to bootstrap and sustain apps, communities and websites. The successful tokens will get a price on the market. Now we need a way for people to trade those tokens for STEEM in a fast, secure and decentralized way.

A decentralized exchange(DEX) allow for buying and selling without having to comprise your private keys and without being worried by hacks.

Because of the unique features that will be outlined below, we will have a completely new class of users to our ecosystem: TRADERS.

How the Traders Will Add Value

traders.jpg

Traders will add value to the STEEM token since it is going to be the main pair of the system. Whenever STEEMs are exchanged for SMTs, the STEEM will be locked up in the smart contract until the SMT is sold. All that STEEM being locked up will reduce the supply of available STEEM on the market and increase the value of the STEEM.

Traders will also have an incentive to hold on to STEEMPOWER since it is going to be their bandwidth. If they desire to create trading bots, then they will need bandwidth and STEEMPOWER to sustain them.

Traders will also be in direct contact with what's going on in the STEEM market and let the word out to other traders...allowing the free flow of information to go to traders everywhere.

Side-note: For those who thing there is already too much going on steemit.com, word on the street is that a major overhaul of the front-end is in the work. Also, I wouldn't be surprised if the decentralized exchange would occurs on a completly different website or a subdomain of steemit.com...such as dex.steemit.com

How The STEEM DEX May Become The Main DEX of Crypto?

No Fees

In the normal world of DEX or any exchange for that matter , their lifeblood is fees. Fees, for traders, are like termites eating their profits. But they tolerate them because they are part of the game. Usually, the more liquidity an exchange has, the more they are willing to tolerate higher fees.

The Steem DEX will have NO FEES on transaction. It will be bandwidth limited like any other transactions based on STEEMPOWER. This creates another source of demand for locking STEEM out of the market.

Unique Assets, Gateways and Bridges

There are several assets that SMT users and creators will have access to by way of the Steem DEX: STEEM, SBD, SMTs, and Simple Derivatives (IOUs). These neighboring assets can increase the visibility and network effect of all created SMTs. STEEM is the gateway token for assets issued on Steem, staying relevant by acting as the bandwidth usage measuring stick across Steem’s SMTs.

With the introduction of IOUs, we are opening the door for exchanges to create their own tokens to act as a gateways and bridge between the fiat and crypto. IOUs of Ether, Bitcoin and other will be available for those who want to trade on a no fees, fast and secure exchange.

The major issue that most business face when launching a new market on an exchange is the lack of liquidity. THE SMT/STEEM market will have the automatic market maker that will allow for automatically bootstrap those market. I doubt that it will be the same for simple derivative IOUs.

Conclusion

I'm super excited for STEEM to have a decentralized exchange. I can imagine website and business built on top of the exchange, acting as bridges and gateway to the STEEM ecosystem. Point of Sale system can be opened, credit cards, etc.

The sky is the limit now.

Sort:  

We will soon need all exchanges to be decentralized as China (or another country) creates their legal tender and closes websites (what are now exchanges) that deal in BTC, ETH, DASH and other soon to be illegal coins.

We need a new exchange. The bitcoin of exchanges. One that has no owner, no location and can't be shut down. I think bitshares is close but way too complicated for adoption to take place. Though it has gone up a lot since regulation hit some asian country recently.

Needs to be
"Hey send me $50 in steem."
"What's your address?"
"@cryptoctopus."

"Did you get it?"
" Yeah, thanks."

Public, anonymous (as many accounts as you want), free (if possible).

@sponge-bob,
Yeah I got your point! You mean exchanges build on top of the block chain technology! Yeah that's the most important thing also! We can't let stupid country regulations to ban exchanges! I mean exchanges, not ICO (it needs regulations)
One more thing, I want to buy STEEM via direct credit card payments! I hope STEEM dev team will think about it as well!

Cheers~

Via CC means Fiat to Crypto. That is where the governments have their noses always poking about because that is where we give them control. I am 100% off banks, debt, taxes, and outside the system.

Leave the fiat to coinbase and let crypto be exchanged for crypto.

@sponge-bob,
"Leave the fiat to coinbase and let crypto be exchanged for crypto."
Here problem again, until I write this comment we all are depend on fiat currency! We have very limited usage of CC! Yeah it will change, but I fear Fiat will be behind everything as it does!
Anyway, I respect your view and personally I need to see the same future as well!

Cheers~

Future. The dollar is dying and no longer necessary for oil purchases. Russia, China and any other major player out there are willing to play with new poker chips like Yuan and Gold.

The dollar will be done away with. (unless the US can get a war started)

The "New Dollar" will be crypto and all will be duped into using it (cuz they did such a nice job fupping duck the paper one).
Then exchanges will be allowed to trade only in "Legal" crypto like the YuanCoin, USDcoin, etc. (which will all be centralized).

Right now we need to educate people on what is a crypto, why we need our keys in our possession and why a centralized cyrpto is NOT crypto. A centralized block chain will need bail outs just like the banking system did.

  • We Need Out !

This is what is happening to the US dollar ^^

The petro dollar is indeed becoming unnecessary and it looks like especially China is starting to show its influence on the global market. However I do have my doubts that they will ever succeed making a centralized crypto successful, but we should keep our eyes open! Unless people are staying in oblivious ignorance...we're gonna have some great times ahead of us. With what the blockchain is able to provide for us the whole infrastructure is gonna change, exciting times :D!!

@sponge-bob,
Indeed "a centralized cyrpto is NOT crypto." I also fear for that! They are trying to faking people by saying "Hi, this is the crypto"! But we are still trapped and attached with fiat! Yeah it might change, but not a very easy thing to do! Anyway now we live in the era of crypto!

Cheers~

I agree about direct credit card purchases for STEEM ...

Bitshares does still sound like the best option by far. It's just like you said, it needs a more friendlier approach for its users. Maybe when EOS arrives it will do just this. BTS still remains my #1 by far, with all it stands for.

BTC is not an illegal coin, if you pay the government ... "License = corruption"

If you pay the government, in taxes you mean. But what about keeping the crypto not converting it back into fiat? Than they can't make you pay anything...
Crypto should be an investment for the future. Sadly it's currently still more of an exchange market to make a quick buck...

This will change soon, don't stay with anger in you heart or you will look like old :p
But yes i agree in the fact that we can scale more with the gouvernement than without at the moment.

Lol, I can get that vibe coming off from that comment, but there was no anger there at all xD Perhaps a little frustration though ;)
And this is not something the government has control of. They can't close a blockchain. Even if they make laws forbidding it, people can choose to disobey those laws.

This is jaw-droppingly exciting!

I'm already thinking of ways to implement SMT with a business and it looks like there's more to come.

I think you've got it wrong, @cryptoctopus, the sky is not the limit... I'm pretty sure there's NO limit to this :)

Steem On!

Hello @cryptoctopus

Just like I said in your previous post Last week, the SMT is going to open a whole new chapter for the Steem Universe.

A DEX will be awesome and I believe that it is better for it to be Integrated to Steemit.com just like the Market.

The idea of a No Fees has already given the DEX a huge headstart.

Steemit is growing at a fast pace, I no longer know what to expect, Everything is happening.

Shared on Twitter

@ogochukwu

Steem is growing. Itegration that doesn't cost $700 dollars per bitcoin (oops misquoted price) and then added fees on top (Yes, Blocktrades - YOU) would be nice.

Hello @hebrew

I checked out your blog and loved what I saw, can't believe I have not found you earlier.

@ogochukwu

Thanks @hebrew

If BTC were to become worth half a million, the fees alone might cost just that xD

Thank you very much, , i like you
Your are the best @hebrew

i like your comment @hebrew.

Whoever gets to completing an easy to use decentralized exchange will win.
All the exchanges are getting screwed with KYC and AML requirements and we need a solution now!

Perhaps I'm not understanding, but if IOUs are created, what entity is on the hook for making the IOU whole? If an IOU cannot be made whole, what parties will feel it? Further, how is liquidity created and maintained? Is liquidity maintained through the IOU mechanism?

Asking genuinely for my understanding. I really like where Steemit is going with ICO and token creation, but I can't wrap my head around the DEX.

Have you tried bitshares DEX? It shouldn't be too different. Basically, it's an exchange on the blockchain. Will all those tokens flying around, you need a way to exchange those tokens back to STEEM.

The IOU will have to be a promise from a third party. Let's say paypal wanted to have a USD IOU on the blockchain, the PAYPAL.USD token would be as valuable as the trust people have in PAYPAL to fulfill their promise.

That's helpful, thank you. And no, I haven't tried BitShares, but I have traded on WAVES's DEX. It was very quick but I didn't really understand how I got the tokens I traded for so quickly (the WAVES UI/UX is not that intuitive to me so it's more my limitation than the tech).

So from my understanding, there is still a party that is responsible for payment. Liquidity is provided for through a third party. So similar to a centralized exchange, you are still exposed to balance sheet risk in IOU. I think I need to research this more because I had envisioned that a true DEX you wouldn't have balance sheet risk at all. Again, maybe I'm not understanding correctly, but I appreciate you trying to help me.

The solution that bitshares came with was their pegged asset such as BitUSD and others to avoid those risks. But there is no perfect system. IOUs are much less volatile (tether) than their countpart that are decentralized (BitUSD, BitCNY, etc.)

Yes, yes, agreed.

This is incredible.!! Thanks for making it easier to grab but I'm not fully understanding this yet. @cryptoctopus please would you mind answering my dumb question?

After all these, are we still going have the steemit platform running?

Hi! steemit.com is the social media website and it runs on a technology called "the steem blockchain". SMTs, decentralized exchange, etc. They are all added features of "the steem blockchain". Steemit.com will still run and be a social media for as long as the eye can see.

This is a great vision and makes a lot of sense. We have already a very well working internal market on Steemit.com and once we have SMT tokens a separate steem based exchange would certainly add value.

Damn, it could be a real game changer in all the whole crypto world! I'm rrally glad to be a part of this revolution.

I think everything that you offer us, will go to us only for good. Thank you.

Congratulations @cryptoctopus
MinnowsPower listed your post "STEEM Decentralized Exchange - The Sky Is The Limit Now" as one of the top 5 upvoted and commented posts of the day...!!!

Exceptional article described SMT and it's features in a simple manner. Very useful content for Steemit community...!!!

100% Upvoted by @MinnowsPower

MinnowsPower is not a bot, I am a Crowdfunding Hybrid
One small UpVote of Yours build MinnowsPower and MinnowsPower will Not Forget Your Support...!!!

Steemit wark post uplode sharing thank you upvote

thanks for sharing keep it up

OK, you have me excited and I only understood about 1/3 of what you said... lol!

Nice, I like thank for sharing @cryptoctopus

I hope that's true. Hate paying fees to different exchanges just to get money in & out.

Do you have any idea when they will be available to be created and used?

SteemFest?!

Seeing as that is being said with a question mark I assume it's an assumption :P

i dont like idea of no fees, because will be many bots and abusers, right now in our market is guy who always sell and buy exactly 140 sbd for months, and nobody can do anything to him , and if it will be in bigger scale , people without robots will be doomed.

That guy is very useful. That bot regulates the rise and fall of Steem/SBD to stop abuse and Boom/Bust scenarios.

I like it... but I didn't always understand :)

because of him normal humans cant make money on boom and falls, because he undercut in seconds, plus in normal exchangers people can buy and sell for profits like in few minutes speculates, and here only for longterm .

Yes, that's true, but what's also true is that you don't pay exchange fees for this service. Personally, I think it's a good exchange and that guy is stopping people getting fleeced, people that don't know what they're doing, minnows just arrived, for example.

Nothing stops you from using the other exchanges :)

robots will be limited by their bandwidth of SP. All that bots can do in an exchange at the end of the day is increase liquidity, which is a good thing. I don't see how the 140SBD guy is doing something malicious.

how is robots in exchangers limited by bandwidth of SP?
right now to exchange in steem market you dont need any sp as i know .

if you tried to make too many transactions you would be bandwidth limited if you didn't have enough SP.

Best Shared.. I share fun videos every day. Please follow me and like to my videos?

thanks for sharing.

Thanks for the succinct explanation! Looking forward to the future of STEEM and crypto in general!

This is a very clever idea...thanks for the innovations. Let Steem reach up to the moon!

Thanks for explaining :) It is kind of easier when someone writes in their own words, although I will also read whitepaper to get all particulars. The only thing that bothers me, they did not make official release date :(

Looks promising :)
Thank you for understandable explanation.

Thanks for clarifying! This is great (albeit a little confusing) news!

I'm liking this because it shows us that this platform has s lot of potential . Above the sky the heavens are the limit , good days are coming

Wayhay, this puts a clearer slant on it. For a while I have thought a steem based DEX would be a great idea. Here's hoping it comes quickly!!

the future is block chain and we have to learn how to adopt to it or we fail like blackberry and nokia,

I really like how the ecosystem of Steemit is developing. In the beginning, it looked like very simple structure, but then with a time, ​ I learned how Steemit is well thought through. Now with smart tokens, ​it goes to the next phase, it gets a little bit more complicated​ and that opens​ new opportunities.

@cryptoctopus - Actually Sir, recently, I heard about The Steem Media Token (The SMT) a lot.. But, the thing is, i don't have mush knowledge about this. However, i am really interested to have many more information regarding this topic.

And also i think you are the main source that i can have a better understanding on this. (I mean, to put a better foundation on the subject of SMT) So, i would like to follow your articles on this topic .

And of course i am following Sir... :) Also, thank you very much for sharing these kinds of valuable posts, and we are expecting many more from you... :) Therefore, I wish to ReSteem your post.

+W+ [UpVoted & ReSteemed]

Thank you for posting this. It's all new to me and I have much to learn. No fees would be wonderful.

i remember when mobile cells were not introduced... communication was there but it was difficult.... since the cell phone has become an reality ... you can even talk to your boss while you are in the loo...in the same way a, DECENTRALIZED exchange surely seems to be the next stop for STTEMPOWER....

Very useful information. Thank for sharing @cryptoctopus

@cryptoctopus,
According to your explanation, I just feel "SKY IS THE LIMIT NOW"! Yeah now it looks like Sky is the limit! You explained it very well! Thank you very much for providing such simple explanation about this complex scenario! Really appreciate your effort!

Cheers~

steeeeem staaahp! we already have BitShares for all this >.<

In other words.. Moon.

I would be wild to see the transition of Steem into being a part Social Media part Exchange Platform. That'll be like day meets night and im sure brains will be blown.

This is fantastic news for steem. The benefit of using a decentralized exchange is that there is no need to put any trust in the exchange platform itself, as the funds are held by the user in a personal wallet, rather than with a third party. Decentralized exchanges can also provide more privacy, while reducing the risk of server downtime, if only for those who are more tech-savvy.

Woow!!!! Thanks for informing us about this

This absolutely makes sense mate. With all the different SMTs that will be created, there must be an exchange platform created to exchange them.
I am still reading the white paper bit by bit, there's really a lot of info there that we need to understand well.

Hi #cryptoctopus so does that mean this will be good for businesses only and just end up as a buying and selling site, an online market

Amazing news.. Can't wait to see this rolling out

having no fees would result in more adoption too as smt leading the way and going mainstream this too would attract many people to adopt it as quickly as possible

Exciting times! and thanks for pondering your thoughts outloud regarding traders! Makes sense.

Thanks for sharing. I've been relatively underwelmed of the introduction of SMT, but with the creation of a decentralized exchange with the major player being steem. Well now that's something to get excited about.

Decentralization is the goal. We have to work on this to get rid of institutions, regulations and other obstacles. Considering that we have no fees: this will be a big incentive for the traders to join. $$$

WoW !!! .. cryptoctopus .. THANK YOU !! - ))

My limited 'crypto-tech' knowledge, shy'ed me away from the white paper .. so i didn't know about the STEEM-DEX !!
.. so AMaZING !!! - )))

" .. The sky is the limit now .. "

.. i humbly .. disagree !!! !!!

" The sky is NOW .. an INVITATION "

lovelovelove )))
greb'Z )

This would be awesome. I would be interested in creating a token. I have so many ideas for this.

As a newbie we depend of you better informed bosses to dish out infos that will encourage the people. Thanks.

hmmm... innnnnteresting... :-)