Topic: Customer Owned Exchange (Read 373 times)

It is good that someone is thinking for something new. But there will be downsides here.

You will also need profits if you are the company who will run it.
Payment to employees and other stuffs to be paid.

You need to think wisely here although there is that "want" for a change. It could be in chaos if not managed in the right direction. It might fall easily.

Maybe a beta test should be created first befoee jumping in the higher kind of business.

Not necessarily. An exchange could be owned by no one if it were fully decentralized. A community could work on a smart contract, for example, publish it and the contract goes on forever without an owner.

In fact IIRC there was an attempt at a fully automated DEX with no owner under Ethereum but I think it was too slow and couldn't be used for real trading.

I think it is feasible since the reward given to the "co owners" are the percentage of what they have shared to the exchange.  Any business model will never give 100% of your contribution, owner will always have the greater portion of the pie because of the maintenance and other expenses.

OP's idea is kinda clever in a marketing sense, since people always wanted to be a part of the so called "co-owner" idea.  I believe if this thing is realized, and done right, this will be one of the successful exchange that will operate in the market.

What about Bisq? Isn't it technically owned by the people? I mean, anyone becomes part of it the moment you launch your client node, being p2p, decentralized and all...

Hahahaha, this is the best reply I have read so far in this forum, I laughed so hard when I saw OP post because I know it would never be possible. This exchanges spend a lot of money running full node of almost all the crypto coin in the world, and you expect them to run a charity organization for you to benefit from, it doesn't even sound fair if you ask me, that should be only made possible in a decentralized exchange and not a centralized exchange.

What are you talking about? It is possible to build a secure exchange in this case through the proper protocols. You do realize that decentralized exchanges are not always secure, don't you?

The model which op suggested though is not feasible in the long run in my opinion.

It would be a big advantage if there would be a customer-owned exchange but how are we going to assure the security of it if everyone would use it and no one would manage its safety? I would still go for a decentralized exchange because I find that idea too risky for traders.

The dividend incentive is the best feature to keep the community engaged.
I can see many new project which use that keeping a stable usage of their platform and more users strive to introduce new members in the case of using the platform.
I think that this idea is great, but you should consider what if the platforms are held by the few? This may cause a short of centralization.

All exchanges are own buy a certain person. Have done any research at all? I like the idea since I think that every shareholder holds a key so that the coins there won't just come to waste especially when an unexpected thing happen to the one holding the key just like what happen to the Canadian exchange which its owner dies.

I hope there is but I'm thinking what would really be the edge on it since you are the only one who controls it. How could you trade with other people if you are the one that's controlling it? Seems like an impossible task yet needs to discuss on how this could actually work.

Is there any crypto exchange out there that don't have an owner? we all know that all of the exchange have an algorithm to operate but it's still needs a manual operation of someone.

I'm thinking what would be the edge of this so called Customer Owned Exchange as no one would fund it or even maintain it for free.

Are you looking at outright partnership by any customer who uses the exchange. More like any user automatically becomes a partner that shares from the proceed of the exchange. Is it like the same uniform share for every member or based on the level of financial involvement to the exchange? Well, I just see the picture of a partnership from your topic.

i do not understand exactly what customer owned exchange is. but i dont like the idea that an exchange that i use is being owned by anybody. what about decentralized exchange platforms? arent they better?

It already came from you. Those are incentives and not really owned by users.

But to summarize it I think it is good enough than nothing.
Referral programs though doesnt work much anymore. Hell, up until now I dont have one. Before it does work but not at this timeline.
It may be better to look for something new.
Giving shares or loyalty programs might be the answer and that is also to keep them from selling their shares.

Good luck.

I think it will be fine. I don't know much about your whitepaper, but the best method is to reward loyalists. You know, there are many ways to cheat in increasing referrals. Your business will be at a loss and will not have any benefit from awarding or creating an increase referrals campaign.

As long as it doesn't have additional tokens or coins like those ICO/IEO project I think it's fair. Tokens or coins will create additional problems, let's just use atomic swap without anything new.

The idea of an exchange that not only rewards customers but is community-owned sounds interesting to me. This could solve the trust issues (if one person is an owner, not much is preventing him/her from scamming everyone at some point), help with recognition of the interests of the customers (it's more likely with this approach that feedback will really lead to changes) and encourage active participation of customers in decision-making (this is contributing to something like civil society). However, it also leads to important questions: how many people will actually take part in operating the exchange? what would be the criteria of choosing these people? how would consensus on important matters be reached? Would there still be an official owner/ someone who is higher in the hierarchy?
In case it's possible to make an exchange where monopoly of a small amount of people in making decisions and basically governing the exchange will be avoided, it might be a great project.

It is both risky and rewarding at the same time. I mean if the exchange customer owned than who is working on the exchange ?

There needs to be sort of a general manager that runs the company and developers and security specialists and designers and stuff like that even pay for support. This means there is a company to be run to be precise. Now if you give the all power to the customers for everything than you are removing that company, who will be the running the exchange? Who will pay for the support people? Who will pay for the technical people ?

Hence, you can build an exchange that is half customer owned but not fully customer owned. There has been a lot of tries for half customer owned, just an example from the biggest exchange in the world Binance gives you a lot of shares for your affiliates moves for example, it used to be as high as 50%, now I think its 20%. There are others with similar mindset.

Forkdelta is only a smart contract platform on the Ethereum network. It doesn't support the exchange of different cryptocurrencies on different blockchains, only Ethereum tokens (which are, in reality, Ethereum transactions). Different is the case of BarterDEX, but there you can only exchange cryptocurrencies, not fiat.

The problem Bitcoin has is mainly not the connection to other cryptocurrencies, but to the "fiat world". The only decentralized model that currently achieves fiat<->BTC exchange without centralized intervention (and regulation) is Bisq, but it has a number of problems (reliance on security deposits, theoretical possibility of escrowers collaborating with scammers). It is impossible to cryptographically prove a fiat transfer has ocurred, so a "perfect" decentralized variant won't exist (at least if there is no "cryptocurrency" variant of a fiat currency).

So the model the OP proposes is an interesting "compromise" between the centralized and a more decentralized model, because it doesn't have the limitations of Bisq or traditional DEXes and can solve the fiat<->BTC exchange problem without the risk of an exit scam. Maybe it could be even governed in a transparent, blockchain-based way (like a DAO) so there is even less risk of a scam by the platform owners.

Paying equity to the users for usage must be capped to prevent a single individual or a small group of people gaining majority control over the exchange operations. Just imagine if a rival or some investors with big pockets can get too much influence on the general operating decisions of the exchange.

How can you prevent a hostile takeover scenario to protect the basic operating policy of the exchange?