Topic: LEVERJ releases technical paper for High-Speed, Non-Custodial trading (Read 208 times)

Announcing high-speed non-custodial trading with Ethereum

The race for decentralization is really a conflict of tradeoffs between user experience and safety. Decentralized protocols such as 0xproject and Airswap err on the side of safety, while centralized exchanges err on the side of usability and economics. The market has certainly favored the latter as decentralized protocols have only captured marginal volume.

The technical issues with on-chain order-books and order-matching are well documented in many places. However, the real issues are economic. Trading on exchanges with on-chain matching is simply a losing proposition for many reasons. For example, any system where cancellations require an on-chain transaction are not feasible for market making. When the price moves fast, orders need to be cancelled and moved repeatedly with millisecond resolution to avoid being filled at severe disadvantage. Market making only works because razor thin margins over millions of transactions accumulate profit. Lags due to blockchain events and congestion attacks would mean a single day can undo the profits of many months.

We analyze this and other issues of current decentralized exchanges and present a protocol with the best of both centralized and decentralized approaches.

The Leverj protocol centralizes speed-critical functions and decentralizes safety-critical functions. Users can use fraud-proofs to detect violations and notify the smart contract that holds custody of user funds.

We invite the public and the best crypto minds to analyze the protocol and help us make it as secure as possible.
from https://blog.leverj.io/announcing-high-speed-non-custodial-trading-with-ethereum-a0e9159e96cd

Read the Protocol Paper Here