Probably i dud not your idea correctly. If i want to buy asset that is available only on binance but i dont have account there. How will i be able to do that with stex??
To be honest i also dont fully understand that. Or all the connections among exchanges will be made through api? If so where my assets will be stored? On binance? As an example
You use STeX in order to trade assets. You can deposit and withdraw them directly from the STeX platform. The trades you perform are done through the liquidity pool which in term is represented as assets on other exchanges and on STeX itself. Here is an example I already mentioned before.
Let's make a few assumptions:
- you want to trade DCR/BELA
- your main exchange is Bittrex
- on Bittrex DCR/BTC is traded but no BELA/BTC
- on Poloniex DCR/BTC and BELA/BTC are traded but you have no account
Now you've got several options if you want to sell your DCR and get BELA.
Right now, the 'easiest' way would be to create a Polo account and either trade your DCR to BTC on Bittrex and then transfer them to Polo and trade BTC/BELA or to transfer your DCR to Polo, trade them there for BTC and then again buy BELA with them.
This is a pretty long way to go but in the end, you'd have your DCR/BELA trade.
With STeX, it will be
much easier and
faster:
The STeX platform is connected to other exchanges and trades through its liquidity pool. What it means is that STeX knows the rates of DCR/BTC and BELA/BTC on Polo and the rate of BELA/BTC on Bittrex.
The chain would be as follows:
you give DCR to STeX >> DCR in STeX liquidity pool >> STeX liquidity pool trades DCR/BTC on Polo (sell) >> BTC in STeX liquidity pool >> STeX liquidity pool trades BELA/BTC on Polo (buy) >> BELA in STeX liquidity pool >> you get your BELA from STeX
This is way more convenient and not nearly as time-consuming as doing those trade yourself + you don't need to wait for the transfer of your coins from one exchange to the other.
But there is more to it. Because STeX
knows all rates of the connected exchanges,
it also always knows where the best rates are. So, if the rate of DCR/BTC is more favorable on Bittrex than on Polo, STeX would trade DCR/BTC there instead of on Polo and if there is a better chain, the algorithm could use that instead, e.g.:
DCR/DOGE(Bleutrade) >> DOGE/ETH (Poloniex) >> ETH/BTC (Bittrex) >> BTC/BELA (Poloniex)
In this example, you'd also give DCR and get BELA but through the STeX liquidity pool, you made the most favorable trade possible compared to trading DCR/BTC and BTC/BELA directly on Poloniex.
There are so many possible solutions and ways to save fees, profit from different spreads, make arbitrage...
The liquidity pool ensures, that there always is capital for your trade and the STeX algorithm uses the pool to make the best trades/chains.
The STeX liquidity pool is much much more of course. Since it gets larger and larger, it can also have the most important (trading-)coins in store and can make the trade that much faster. It all depends on the management of the liquidity pool, of course.
If there would be a dedicated DCR/BELA market, you'd be absolutely right, the number of orders would be very few and the rates really bad since the order book would be nearly empty because few people would trade this pair. BUT there is no such market and the order books of DCR/BTC and BELA/BTC on other exchanges are much more likely to have more entries in them and so your rate is way better.
That way, you'll be able to trade the most exotic pairs you can imagine without the need for a dedicated trading market while still having the best rates possible + filled order books.