The Evolution of the Decentralized Exchange: A Brief History

A Vision

The Beginning

  1. Capital deposits
  2. Order broadcast
  3. Order matching
  4. The exchange of tokens

DEX Generations

4th generation DEX — Currency Agnostic / Fully Decentralized — Protocol Based: Not limited to specific blockchains.

True Decentralization and the 4th Generation DEX

  1. XBridge
  1. Capital Storage — Funds remain in each party’s wallets, and are not entrusted to a third party at any stage.
  2. Order Book — Orders are broadcasted directly from party to party over the 400+ Service Node network and are completely decentralized. Order broadcast is via a spam-resistant p2p interchain overlay network. A party’s app compiles the order book themselves instead of relying on a central order book service. All integrators and services on the protocol share the orderbook and liquidity. Blocknet Service Node host full nodes of the blockchains the protocol is compatible with, manage and cross-verify the orderbooks, verify interactions between peers and route communication between blockchains. This orderbook shares liquidity for any services that utilize the Blocknet Protocol. Currently there is just support for a public order book, but there are plans for a private orderbook and direct trading as well.
  3. Order Matching — Orders are matched directly between parties. The order matching is undertaken by the Order Maker in a direct p2p action with a Taker of their selection. When one accepts another’s order, their clients communicate to set up the exchange process, and this is broadcasted over the inter-chain network. The matched orders then proceed with the cross-chain atomic settlement between the counterparties.
  4. Asset Exchange — The exchange of tokens is achieved without the involvement of an intermediary, in a manner that does not require counterparties to trust one another beforehand. An atomic protocol is utilised (meaning that either the exchange of both currencies takes place, or nothing takes place), which employs OP_CHECKLOCKTIMEVERIFY to nullify transaction malleability-based attacks.
  1. Support for OP_CHECKLOCKTIMEVERIFY
  2. A stock JSON RPC interface from Bitcoin Core
Sources: https://docs.google.com/spreadsheets/d/1qVcX8pA7UFROXGz6UH6fD9lZ9ZvATO-AT8cAs7p3ukY/edit?usp=sharing

--

--

Blocknet is a 2nd layer blockchain interoperability protocol that enables communication, interaction & exchange between different blockchains.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
The Blocknet Protocol

Blocknet is a 2nd layer blockchain interoperability protocol that enables communication, interaction & exchange between different blockchains.