Is WCX a decentralized exchange
AirSwap (AST) is another entry in the long list of decentralized exchange tokens recently launched.
In particular, AirSwap is a decentralized exchange (DEX) for ERC-20 tokens based in Hong Kong. It uses its own cryptocurrency, the AirSwap token, or AST, to create markets for trading thousands of existing ERC-20 tokens. All of this happens without the need for a centralized market maker.
Given the plethora of other DEX tokens on the market, can it really keep up?
In this AirSwap review, we will delve deep into the project including its technology, development and roadmap. We will also analyze the potential use cases for the AST token and their long-term acceptance potential.
What is AirSwap?
The AirSwap exchange was designed with the privacy and safety of users as a top priority. The company wants to offer its users a platform where they can trade anonymously and peer-to-peer without incurring third parties and trading fees.
The AirSwap token itself is an ERC-20 token, and the platform uses the Ethereum blockchain to create a decentralized trading platform. The platform itself was also designed to support Ethereum-based ERC-20 tokens, which is very useful for traders given the large number of altcoins that are based on the ERC-20 standard.
AirSwap held a crowdsale in 2017 where they issued the AST token to contributors. This was a relatively successful ICO, with the project raising over $ 30 million
AirSwap created the swap protocol to enable transaction-free trading. The swap protocol uses smart contracts on the Ethereum blockchain to process orders. Everything else is handled out of the chain. The AirSwap team believes that connecting off-chain traders makes trading on their decentralized exchange faster than competing decentralized exchanges like EtherDelta, whose fulfillment and dissemination of information depends on the blockchain.
The AirSwap team realized early on that matching trades in the chain were not the best solution due to the delays involved. When doing trades in the chain, you have to wait for the nodes to reach consensus on transactions. On the Ethereum network, this takes about 15 seconds. This is far too slow for an exchange where jobs are supposed to be completed in microseconds.
Another problem with using on-chain order routing is that bad actors have the ability to manipulate public data from the blockchain. In traditional stock markets this is known as front running and becomes a problem for the decentralized exchange of cryptocurrencies when all order information is published publicly on the blockchain.
Because AirSwap uses the off-chain swap protocol, it eliminates the possibility of front running that can occur when a third party is familiar with confidential job information that could be exploited. Another advantage of the swap protocol is that there is no central order book. This is possible because AirSwap implements an indexer and an optional oracle.
The indexer on AirSwap works like a search engine for the DEX. It stores counterparty information and forwards it privately if this is required by the counterparty in a trade. If a trader is unsure what price is appropriate for a trade, he can consult the oracle.
The oracle is there to suggest pricing. This enables AirSwap DEX pricing even with low liquidity.
How does AST Token work?
The AST token is primarily used as a means for market makers (also known as makers) to place markets on AirSwap. When a manufacturer wants to offer a cryptocurrency for another at a set price on the exchange, it uses the AST token to create the market for that altcoin. This is also known as providing liquidity for the exchange.
The manufacturer sets the bid rate, or the price it is willing to pay, as well as the ask rate, which indicates how much it is expected to receive. The manufacturer can create a market for a particular asset because it holds a large portion of the asset on offer. Then they benefit from the difference between the bid and ask price, also known as the spread.
The AirSwap user interface for buying / selling tokens. Source: Airswap
Traditional exchanges have discontinued market makers, but AirSwap allows anyone to become a market maker by signaling their intention to provide liquidity. This is done by staking out 250 AST. Once the AST is staked, it will be suspended for seven days and a market will be created.
The amount wagered to become a manufacturer and the length of the lockdown are both set by AST holders who vote on the amount wagered and the lockout period. Initially the stake was only 100 AST, but the coin holders voted to increase it to 250 AST.
On the other side of the market are buyers or those who buy altcoins that are listed on the exchange by the manufacturers. The consumers do not pay any fees other than the network transaction fees. You can discover all manufacturers on the platform, get price information and place orders - all for free.
The AirSwap team
AirSwap's founders are Don Mosites and Michael Oved who were together students at Carnegie Mellon University. Oved became a successful algorithm trader while Mosites became a full-stack designer and entrepreneur. Mosites spent over a decade developing products at companies like Zynga and Google before launching AirSwap with Oved.
AirSwap founder. Image over liquid
A third co-founder is Sam Tabar, who has 15 years of experience in the financial industry. Tabar was previously Head of Capital Strategy at Bank of America Merrill Lynch and was previously a graduate of Oxford University and Columbia Law School. Other notable figures on the AirSwap platform include former hedge fund manager Michael Novogratz and Joseph Lubin, co-founder of Ethereum. Both are advisors to the project.
AirSwap is active on multiple social platforms and has a modest following for a blockchain project. Twitter followers have passed the 30,000 mark, which isn't huge. On the AirSwap sub-Reddit there are only just under 3,600 followers. Posts are sparse, with several per week and no more than a handful of comments on each post.
The AirSwap team holds a weekly discussion where the interaction is a little more intense. The Telegram channel has a little over 3,600 followers and on Facebook the AirSwap page has a little over 4,100 followers. The AirSwap team is continuing the updates on both platforms.
Development and Roadmap
One of the best ways to get an idea of how much development is going on in a project is through the GitHub activity. It is in these public repositories that most projects publish their open source code for their community to watch.
I decided to jump into the Airswap GitHub to see how much code has been pushed by the developers. Below are the code commits for the three most active repositories in the project.
Code commits three active repos to AirSwap
As you can see from the commits over the past 12 months, the developers are still quite active. Of course, this is nowhere near as much code pushed by other projects we reviewed.
This also doesn't seem to back up the number of updates announced by the team. For example, in their 2018 Annual Review, they stated that they pushed 2 million lines of code in the year. It is therefore also possible for developers to send code to private repositories for later inclusion in the main repos.
Likewise, there may be other reasons why Airswap hasn't released as much code lately as other projects. AirSwap was launched back in 2017 and a lot of code was released in 2018. Whether we're likely to see a lot more commits this year depends on what they want to post on their roadmap.
So far, the only publicly available roadmap is the first that was published back in November 2017. However, the team plans to release an updated roadmap for "early 2019" ..
Of course the special reddit comment was made about two months ago and we're currently heading into March. We can only hope it is on its way soon, but if you want to keep up to date with it, you can keep an eye on the fluidities on the official blog.
AST Token Achievement
AirSwap withheld its ICO in October 2017, met its hard cap, and raised $ 33 million. AST tokens were priced at $ 0.30 at the ICO and peaked at $ 2.08 in January 2018, but were then swept away in the bear market for cryptocurrencies.
The coin continued to fall throughout 2018, and even if the major Crpyocurrencies showed some signs of life in early 2019, the AST token remains heavily depressed. As of February 2019, AST is trading at just $ 0.032621, or almost 1/10 of the ICO price. That's quite a blow to early investors.
Since AST is an ERC-20 token, it can be stored in any ERC compatible wallet. However, if you want to use it, it must be stored in one of the wallets that can be connected to the AirSwap platform. These include MetaMask, Ledger, Trezor, and Opera. It also supports mobile wallets like Trust, imToken, Status and Coinbase Wallet.
Register with Binance and buy AST tokens
Those looking to buy AST can find it on Binance and IDCM, as well as Huobi Global and of course the AirSwap platform itself. AirSwap reportedly supports Fiat purchases through the Wyre application, but I was unable to get the Wyre widget to work on the AirSwap website.
AST currently sits at rank 398 on CoinMarketCap. There appears to be a relatively healthy level of liquidity for the token, even though over 90% of the volume is only on two exchanges. This means that most of the liquidity depends on these central exchanges (the exact problem AirSwap is trying to solve).
The AirSwap platform got off to a strong start in 2017 with a talented group of founders and a strong advisory team. However, the 2018 bear market really took some off the platform. While it should have grown tremendously since launch, it appears to be dwindling instead, with very little growth in trading volume.
The idea of free trade certainly has some appeal, but traders for some reason haven't really looked at the concept. Currently, the largest trading volume for the DEX is with DAI, Chainlink and OmiseGo. However, the daily trading volume is below $ 30,000.
The AST token has good potential if the platform can get some grip on the ground, and at as low a price as it is now, the AST token could be a big bargain if the AirSwap team can breathe life into their project. Toll-free trading is certainly an incentive, but so far it doesn't seem big enough to attract traders through the crowds.
Selected image via Fotolia
Disclaimer: These are the author's views and should not be construed as investment advice. Readers should do their own research.
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