The Ethereum team is planning something very interesting, as earlier today an announcement was made in regards to EtherEx, an open source decentralized exchange built on Ethereum. On the current placeholder webpage, we can also find the interesting slogan of ‘A decentralized future calls for a decentralized exchange”.
It is an interesting time period to announce the upcoming launch of EtherEx, especially considering the Bitstamp debacle which is still echoing throughout the world of cryptocurrency as we speak. On the other hand, now is a very opportune time to bring positive attention to the theme of “crypto exchanges”, and hopefully, EtherEx will be able to do just that.
EtherEx : Brief Overview
As Ethereum is a rather unique cryptocurrency because of its technology, their EtherEx exchange will work slightly differently compared to what we are used to in the world of digital currency. EtherEx is built up of many Ethereum contracts which will interact with one another to make trades. Users put in trade information and send funds to a contract which will execute the required trade.
Unlike with current cryptocurrency exchanges, EtherEx contracts will always hold the funds until the transaction is complete in a form of escrow, making these trades tamperproof, as not even the EtherEx creators can touch the funds. Once a contract receives both sides of the trade, funds will be distributed to the respective parties automatically.
While the technological background of EtherEx might sound rather overwhelming, the goal is to make it look and feel like a normal cryptocurrency exchange. As such, EtherEx will come with its own order book, allowing users to do both limit and market orders. More functionalities will be included on launch, but were not announced at this point in time.
When a new exchange platform launches, everyone is eager to find out which kind of currencies will be supported. EtherEx will support Ethereum and Bitcoin at launch, with most major altcoins to be added the same day if all goes to plan. Fiat currency will not be supported at launch , but the EtherEx team hopes to add that functionality at a later stage.
On the topic of supporting currencies other than ETH, the EtherEx team is working hard to find a solution so they can integrate non-Ethereum coins into their trading engine. Many options are currently being explored and a combination of various resources will most likely be the proper solution. Things will be a lot easier and smoother once a future version of Ethereum fully supports off chain cryptocurrencies.
Coins with their own blockchain (such as Bitcoin, Litecoin, Dogecoin, et cetera) will be kept in either side chains or trusted third party multisig wallets. On the other hand, coins existing on Ethereum (ether, subcurrencies, et cetera) will be held in the contracts themselves. Part of the Developer Fund will be used to issue a bounty to anyone who can find a critical exploit in the EtherEx code.
Unlike cryptocurrency exchanges running on independent services, EtherEx runs on Ethereum, making it nearly impossible to DDoS the platform. However, the website and interface used to access EtherEx can be DDoS’ed, but this would an inconvenience instead of a major problem. Both the website and underlying infrastructure will use cutting edge security against attacks.
EtherEx’s first code release can be found here : https://github.com/etherex/etherex
While there is much more information to cover, this is just a preliminary article. A more in-depth article and a potential interview with the creators will be published as we get closer to the release date, which has not been announced as of yet.
Source : http://www.etherex.org