The Comdex Ecosystem saw the need for a decentralized exchange (DEX) on the Cosmos network that would provide a platform for individuals to trade digital assets without the need for a central authority or intermediary. Thereby allowing for greater security and autonomy, as users would be in control of their own private keys and funds. Additionally, a DEX on the Cosmos network offers faster and cheaper transactions than centralized exchanges, as well as improved scalability and interoperability with other blockchain networks.
TYPES OF CRYPTOCURRENCY EXCHANGES
There are several types of cryptocurrency exchanges, including:
- Centralized Exchanges (CEX): These are traditional exchanges that are owned and operated by a central authority. They act as an intermediary and hold users’ assets in custodial accounts, making them vulnerable to hacking and other forms of theft.
- Decentralized Exchanges (DEX): These are exchanges that are built on blockchain technology and are not controlled by a central authority. They allow for peer-to-peer trading and users retain control of their own assets.
- Hybrid Exchanges: These are a combination of centralized and decentralized exchanges, they offer some features of both.
- P2P Exchanges: These are peer-to-peer platforms that connect buyers and sellers directly.
- Brokerage Exchanges: These platforms allow users to buy and sell cryptocurrencies at a price set by the brokerage, rather than through an open order book.
- Crypto-to-crypto Exchanges: These platforms allow the trading of one cryptocurrency for another, without the option to exchange fiat currency.
- Crypto-to-fiat Exchanges: These platforms allow the trading of cryptocurrencies for fiat currency, such as USD or EUR.
Our Focus will be on Hybrid Exchanges which combine the features of both centralized and decentralized exchanges.
Features of Decentralized and Centralized Exchanges
Decentralized Exchanges; DEXes use automated market makers (AMMs) to incentivize market participants to provide liquidity to and profit from various asset markets. AMM-based exchanges have been largely successful due to their ability to meet the needs of users to exchange assets while handsomely rewarding liquidity providers.
AMM stands for Automated Market Maker. In the context of decentralized finance (DeFi), an Automated Market Maker (AMM) is a smart contract on a blockchain that allows for the trading of assets without the need for an order book. Instead of matching buy and sell orders like a traditional exchange, an AMM uses a mathematical formula to determine the price of an asset based on the amount of that asset and another asset in the liquidity pool. This allows for continuous trading of assets and eliminates the need for order book maintenance.
Decentralized exchanges (DEXs) that use AMMs to facilitate trading are often referred to as AMM DEXs. Meanwhile, Most centralized exchanges use orderbooks, and market makers play an important role in ensuring liquidity across asset markets. Order Book exchanges work by allowing buyers and sellers of assets to place buy and sell orders at predefined prices, which are then executed by market makers.
What is cSwap?
cSwap is a hybrid DEX that integrates both orderbook and AMM liquidity pools to become the principal liquidity source for the Comdex ecosystem and bring cross-chain markets and limit orders to DeFi, where traders and arbitrageurs can implement sophisticated trading strategies to trade their assets.
cSwap was built with inspiration from the work of the Crescent Hub team, with functionalities tweaked to meet the needs of cSwap by utilizing a hybrid model based on order book and AMM-based exchange.
Benefits of cSwap
cSwap allows users to swap assets through pairs in liquidity pools while maintaining greater control of price in a capital-efficient manner. Users can provide liquidity to pools for tradeable asset pairs. The AMM of the pool then determines the prices of the assets in the pool based on changes in liquidity from trades. Every swap order placed by users is ultimately captured as a limit order with varying parameters.
cSwap will provide users with the functionality of an order book system where users can place limit or market orders while also allowing users to purchase or sell an asset at the best possible price rather than at a set exchange rate offered by the system. This AMM and order book system combination makes cSwap a hybrid dex. Hybrid dex has a matching engine that matches any buy/sell orders on the order book. This is done by calculating groups of limit orders and matching them with other orders in the order book.
cSwap’s liquidity incentive or rewarding system is designed differently from the typical liquidity mining reward programs adopted by most AMM-based Dexes. cSwap’s liquidity farming rewards are designed for long-term efficiency and sustainability. It makes sure rewards are distributed to the users who provide maximum value to the protocol and disincentives mercenary capital.
cSwap on Comdex offers several benefits for users and these benefits include :
- High performance: cSwap is built on the Comdex protocol, which was created for trading at a high rate of speed. Users can trade swiftly and effectively with low latency.
- Low fees: Because of its low trading fees, cSwap is more user-accessible and cost-effective.
- Security: Users can trade their tokens with confidence on cSwap since it employs smart contracts that have undergone auditing and has a strong security system.
- Accessibility: Users can easily conduct transactions with cSwap from any location and on any device with an internet connection.
- Liquidity pool: cSwap enables users to add liquidity to pools and earn from their trading commissions, which can be a passive income source
Guidelines on how to use cSwap
This is a step to step guide on how to use the cSwap with images for proper and better understanding.
First, you have to create a Keplr wallet
Go to https://wallet.keplr.app/ to install it on your chrome extension and input your password
Steps to trade/ swap
- Go to https://www.cswap.one
2. Click on “Connect” to connect your Keplr wallet
3. Click on “Trade”
4. Select the token you want to swap by clicking on the “From” option
5. After selecting the token you want to swap from, select the token you want to swap to
6. Input the desired amount of tokens you want to swap.
7. Click on “Swap”, Keplr wallet will show you a pop-up asking for your approval to complete the transaction.
Comdex is a DeFi infrastructure layer for the Cosmos ecosystem, powering DeFi in the multi-chain future. Comdex builds solutions to democratize finance by giving investors exposure to a large range of asset classes.
Join the conversation: https://t.me/ComdexChat
Follow on Twitter: https://twitter.com/ComdexOfficial