Cryptocurrency and Blockchain technology have certainly evolved over time from Bitcoin’s early years to now. This New Year brings with it entrance into a fresh decade for Crypto. As Mr. Poon looks ahead, he and the team see “Switcheo as the Bitcoin for all types of financial transactions and all types of assets. This means no need to build smart contracts, but fully trustless and permissionless exchanging, hedging, trading, borrowing, lending, etc.” With each new update, the team comes closer and closer to bringing that vision to complete fruition.
Switcheo relies on it’s decentralized exchanges (DEXs) to fulfill it’s vision as the premier trading solution. Decentralized Exchanges have been solving the problems laid out by centralized financial systems; and along with Switcheo, are part of the revolutionary Decentralized Finance (DeFi) movement.
DeFi products have four key characteristics: does not rely on trust, permissionless, open and transparent, and does not have one single point of failure. Many DeFi products may touch on one or two characteristics, but Switcheo hits all four out of the park (Switcheo, “DeFi”).
Switcheo is a Decentralized Exchange “built on a unique infrastructure that supports instant trade confirmations…” while remaining non-custodial (Switcheo, “Works”). Switcheo supports 3 blockchains currently, Ethereum, EOS, and NEO. However, this can be added to easily when community members who hold $SWTH Governance tokens propose and vote on new chains/pairs.
Typically, a DEX will have have only two components (smart contract and UI), but Switcheo works on three layers (UI, smart contract, and Switcheo Matching Engine). Throughout their interaction with Switcheo Exchange, users retain full ownership of their assets in a fully non-custodial way. Tokens are deposited straight into the smart contract rather than the exchange’s wallet.
Switcheo’s Matching Engine is known as Switcheo TradeHub. Order matching is done on this side-chain and this allows for instantaneous confirmation of orders updated in real-time, rather than only after each block is produced. Due to this modem operandi, a large number of orders can be made and filled rapidly, making it impossible to have failed transactions wasting network fees. Whereas on-chain DEXs can only execute orders as quickly as blocks can be generated. This often leaves traders waiting up to several minutes between transactions (Switcheo, “Equal”).
TradeHub makes trading less cumbersome and provides a stream-lined user experience.
Switcheo is able to guarantee the validity of order signatures before the miners even receive the transactions — returning financial freedom taken by centralized entities, back to the user. This also significantly reduces the amount of fees paid by the user to complete transactions (Switcheo, “Equal”).
Sure, there are other DEXs making attempts, but the challenge remains that they are still constrained by the blockchain they are built on (Ethereum DEX can only allow trading of Ethereum and ERC-20 tokens, for example). Switcheo has made a breakthrough in creating a DEX that operates on Ethereum, EOS, and NEO blockchains. It features cross-chain trading through Atomic Swaps and uses the Cosmos Network SDK.
Demex, the team’s newest release, is a fully decentralized derivatives exchange built on a scalable Layer-2 blockchain. It supports ANY cryptocurrency derivative product and is capable of handling up to 10,000 transactions per second and offers 150x leverage. Not only does it list multiple trading pairs, liquidity pools, and staking rewards, you can begin trading immediately and anonymously due to lack of KYC requirement (Choy, 2020). Demex is censorship resistant, and preserves privacy due to no personal data being shared or stored. Therefore there is no chance of a KYC leak.
Users who stake their SWTH tokens also receive 90% of trading fees. There are currently over 20 nodes validating transactions, with the goal of growing to over 100 Validators within time. Among its competitors,
Demex is pegged to have “the fastest launch cycle and be the most decentralized and scalable DEX in operation.” Along with “…the most features including AMMs, Incentivized Insurance Funds, etc.”(Poon).
Mr. Poon and the team continue to work to create the best decentralized exchange, and always with the trading experience and user in mind.
Looking toward the future of finance, Mr. Poon sees cryptocurrency as a “gradual inevitability”. He shared his belief that soon most financial activity will be done on Layer-2 blockchains, side-chains, etc. — helping interoperability develop with older chains like Ethereum and Bitcoin through Multisignature (requiring multiple keys to authorize a transaction), MPC (Multiparty Computation), and Zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). Legacy blockchains that have a proven Store of Value (SoV) like Bitcoin will also take their place as reserve currencies, in Mr. Poon’s opinion (Poon).
Switcheo began as a “non-custodial cross-chain exchange”, but has grown to much more. The team continues to build and develop with the trader in mind and true decentralization as a core value.
Mr. Poon suggested that some sort of marketing was in the works, once futures trading goes live, in order to help people find Switcheo — meaning this DEX is still a hidden gem in a sea of blockchains.
In the meantime, Poon offered some suggestions for the Switcheo community: As a community member, the most important thing one can do is use the protocol and share your experiences with others. Also, building tools around the protocol and ecosystem, can help others understand/use the protocol more efficiently (especially first time traders). There are grants available through the Switcheo Community Development Fund to help developers on their journey to build appropriate tools for the protocol. Lastly, simply share the Switcheo story on social media, like Twitter. The community should engage in the wider cryptocurrency conversation and help make Switcheo a part of it (Poon).
And now, to get to know (another one of) the man behind the protocol a bit better… we have asked Mr. Poon to participate in…
Show & Tell
Show — share a meaningful photo that represents something special to you, or would help us understand you better.
— -and/or — -
Tell — tell us about a life experience, achievement, or reflection that impacted your life in some meaningful way.
Making and losing my first million from trading was a humbling experience that taught me alot. 1) Learn from your mistakes. In this case, wealth preservation was a skill I did not have, which I fortunately learnt quickly after, and it helped me recover multiple times over. 2) Greed exists in everybody. It is up to you to fight it and you will be better for it. 3) There are many things more important than money. Treasure the things that cannot be recovered once lost. 4) Never swallow yourself in regret or self-pity — always look forward. Regarding wealth, one must remember that it is always possible to make a comeback — here, even the thickest tree can eventually be chopped down by a pocket knife. (Poon)
The team at Pacific Validators are with you — We certainly treasure our peace and tranquility in nature, and hope that you enjoy many days treasuring the things you find most valuable in your life.
Choy, L. (2020, December 16). Demex Spot Trading is Now Live! Medium. Switcheo. Retrieved January 8, 2021, from https://medium.com/switcheo/demex-spot-trading-is-now-live-718516feec11
Santana, A. (2021, January 5). Interview with Ivan Poon. personal.
Switcheo. (2019, December 4). Are Decentralized Exchanges Built Equal? The Switcheo Blog. The Switcheo Blog. Retrieved January 8, 2021, from https://blog.switcheo.network/are-decentralized-exchanges-built-equal/
Switcheo. (2019, September 26). Switcheo Discovery: What Are DeFi Applications? The Switcheo Blog. The Switcheo Blog. Retrieved January 8, 2021, from https://blog.switcheo.network/switcheo-discovery-defi/
Switcheo. (2019, September 5). Switcheo Discovery: How Switcheo Exchange Works Part 1. The Switcheo Blog. The Switcheo Blog. Retrieved January 8, 2021, from https://blog.switcheo.network/switcheo-discovery-how-switcheo-exchange-works-part-1/
Switcheo. Finance without limits. Switcheo. Retrieved January 8, 2021, from https://switcheo.network/our-story