Stakenet DEX — Multi-Exchange Trades
By: Stakenet Team
Tags: Masternode, Lightning Network, Decentralized Exchange, Bitcoin, Xsn Articles

It is one of our fundamental beliefs that for an exchange to be successful, they need a healthy supply of liquidity so that users are able to trade consistently without having their orders sit on the orderbook for extended periods of time.

With the release of V 2.9.2, Stakenet brings a tested and proven Decentralized Exchange (DEX) Aggregation system which through the use of our API allows traders to connect and bridge liquidity from other exchanges onto the first ever Lightning DEX, this has been dubbed Vortex. Vortex is the ability of our Stakenet Light Wallet which allows it to connect and bridge with other exchanges (both centralized and decentralized) and execute trading strategies.

What is DEX Aggregation?

The way a DEX Aggregator works is by spotting differences in the prices between assets. In simple terms, imagine if the price of BTC/USD was $10,000 on one exchange and $9,900 on a different exchange — the aggregator can take advantage of the difference in price by buying low from the one exchange and selling high on the other.

Our DEX Aggregator, will work for the user by checking multiple exchanges to find the best prices and post the orders within the Stakenet DEX orderbook. This works in favour of not only the DEX user, but the other exchanges as well as they get increased volume.

We believe this will change the way all DEX’s operate by allowing for this added inter-connectivity to solve much of the liquidity issues plaguing the current market as well as giving benefits to the user. It is this inter-connectivity that the DEX Aggregator offers that will not only benefit the Stakenet DEX, but other DEX’s as well by allowing access to all the liquidity that has been solely limited to Centralised Exchanges (CEX) in the past.

This provides what we believe is a much needed benefit for the wider market and industry by allowing more liquidity and depth to all DEX’s (something never having existed before) and the corresponding CEX/DEX.

What benefits are there to the user?

Until now running arbitrage, bots and aggregators were a complicated scenario to get working alongside DEX’s. A cross exchange arbitrage at its core, requires instant trade settlements to work correctly. As the traditional DEX model uses Atomic Swaps, these rely on standard blockchain confirmations between each trade which resulted in difficult on boarding of liquidity and locking out traditional trading firms. As our DEX uses the Lightning Network, it allows us to have instant settlements (via Lightning) and in addition to this, it allows for a unique DEX API.

Stakenet is about bridging the Crypto-verse, one of the ways to do this is through the use of our DEX. How could this be the case you might ask? There are many exchanges out there, which means that liquidity is spread-out across these exchanges. They are like little islands all on their own, at Stakenet we aren’t interested in building another isolated island, we are in the business of building bridges between those islands in a real-time manner.

With Stakenet’s API the user can connect into any exchange that offers the use of API for trading like Binance, Livecoin, KuCoin, Bittrex, etc and bridge the gap. This will allow them to trade effectively from the exchanges orderbooks to the Stakenet DEX orderbook.

The XSN DEX is a true Decentralised Exchange that does not require a user to forgo their rights to be anonymous and with the use of liquidity partners, users are able to tap into the most liquid exchanges, trade amongst themselves, and keep ownership of their own coins. In addition to this, you do not need to own any other cryptocurrencies to use the DEX, other than the currencies you want to use to trade on it.

You can view the Stakenet API in action below where a live trade happening on the Stakenet DEX orderbook and it’s corresponding trade happening within Binance’s orderbook:

What makes this different?

Up until now, aggregators couldn’t run correctly on DEX’s as the settlements were not instant. This meant that once a trade was done, they had to wait for the funds to be received via normal blockchain confirmations before they could make the opposing trade — and in trading, every second counts.

As our DEX is built upon the Lightning Network (LN), the API allows for bots to connect and trade, and perform arbitrage with other exchanges. What truly makes our DEX unique and stands out in the crowd is that trading over the LN — once a trade is submitted and filled, the settlement is instant.

This allows Vortex to trade confidently as once the trade has been performed on the Stakenet DEX, it knows that it has the funds within microseconds and can complete the corresponding trade within the CEX/DEX orderbook.

How Does This Impact You?

Apart from the increased liquidity available within the DEX orderbooks, there is no other impact on you as a user.

Vortex automatically places orders into the corresponding orderbooks within the DEX as if it was a regular trade and to you, it will appear as if its just a regular trade.

There is no increase in cost for the user as the only fee applicable to them, is the Stakenet DEX trading fee of 0.25% and any costs for trading on a CEX is carried by the liquidity partner.

Overall

It is our firm belief that our Vortex will benefit the wider market and industry by allowing more liquidity and depth to flow through to not only CEX’s, but all DEX’s and CEX’s alike, which is something that has not existed before.

As it conglomerates the user bases, the aggregators do the work of spotting differences and allowing the users to get the best price available, whilst exchanges benefit from increased volume.

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