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STEEM Decentralized Exchange - The Sky Is The Limit Now by cryptoctopus

View this thread on: hive.blogpeakd.comecency.com
· @cryptoctopus · (edited)
$161.23
STEEM Decentralized Exchange - The Sky Is The Limit Now
![dex.png](https://steemitimages.com/DQmPBsK9AqkPGqjVFUyfbha5B6mrgWbn7a616EpbJa9VwzM/dex.png)

# Introduction

I'm still going through the whitepaper and pondering the implication/application of this new technology on the STEEM blockchain. My goal is to simplify for you what it is, what it means and how it's going to make a difference for you on the long run.

Today, I'm going to be talking about the decentralized exchange aspect of the [SMT whitepaper](https://smt.steem.io). 

## More than Social Media

![steem dex.jpeg](https://steemitimages.com/DQmR5MpafC96apjAHW7KJSRt2pQS97S5yhWXGMY1ignY6Xw/steem%20dex.jpeg)

A lot of people are on steemit.com because of the social media aspect of the [STEEM blockchain](www.steem.io). In fact, a lot of new comers get confused because people have a hard time separating the two. Steemit.com is the website while STEEM blockchain is the technology that enables it.

SMTs introduce a new aspect to the STEEM blockchain: tokens

Tokens will be used to bootstrap and sustain apps, communities and websites. The successful tokens will get a price on the market. **Now we need a way for people to trade those tokens for STEEM in a fast, secure and decentralized way.**

A decentralized exchange(DEX) allow for buying and selling without having to comprise your private keys and without being worried by hacks. 

Because of the unique features that will be outlined below, we will have a completely new class of users to our ecosystem: TRADERS. 

#### How the Traders Will Add Value

![traders.jpg](https://steemitimages.com/DQmSDKrSuv6EcZeoXxB8nfGh5eS2SFN7F6UL9WT7RMj2hPa/traders.jpg)

Traders will add value to the STEEM token since it is going to be the main pair of the system. Whenever STEEMs are exchanged for SMTs, the STEEM will be locked up in the smart contract until the SMT is sold. All that STEEM being locked up will reduce the supply of available STEEM on the market and increase the value of the STEEM.

Traders will also have an incentive to hold on to STEEMPOWER since it is going to be their bandwidth. If they desire to create trading bots, then they will need bandwidth and STEEMPOWER to sustain them. 

Traders will also be in direct contact with what's going on in the STEEM market and let the word out to other traders...allowing the free flow of information to go to traders everywhere. 

**Side-note:** For those who thing there is already too much going on steemit.com, word on the street is that a major overhaul of the front-end is in the work. Also, I wouldn't be surprised if the decentralized exchange would occurs on a completly different website or a subdomain of steemit.com...such as dex.steemit.com 

## How The STEEM DEX May Become The Main DEX of Crypto?

#### No Fees

In the normal world of DEX or any exchange for that matter , their lifeblood is fees. Fees, for traders, are like termites eating their profits. But they tolerate them because they are part of the game. Usually, the more liquidity an exchange has, the more they are willing to tolerate higher fees.

The Steem DEX will have NO FEES on transaction. It will be bandwidth limited like any other transactions based on STEEMPOWER. This creates another source of demand for locking STEEM out of the market. 

#### Unique Assets, Gateways and Bridges

>There are several assets that SMT users and creators will have access to by way of the Steem DEX: STEEM, SBD, SMTs, and Simple Derivatives (IOUs). These neighboring assets can increase the visibility and network effect of all created SMTs. STEEM is the gateway token for assets issued on Steem, staying relevant by acting as the bandwidth usage measuring stick across Steem’s SMTs.

With the introduction of IOUs, we are opening the door for exchanges to create their own tokens to act as a gateways and bridge between the fiat and crypto. IOUs of Ether, Bitcoin and other will be available for those who want to trade on a no fees, fast and secure exchange. 

The major issue that most business face when launching a new market on an exchange is the lack of liquidity. THE SMT/STEEM market will have the automatic market maker that will allow for automatically bootstrap those market. I doubt that it will be the same for simple derivative IOUs.

## Conclusion

I'm super excited for STEEM to have a decentralized exchange. I can imagine website and business built on top of the exchange, acting as bridges and gateway to the STEEM ecosystem. Point of Sale system can be opened, credit cards, etc. 

The sky is the limit now.
πŸ‘  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , and 192 others
πŸ‘Ž  
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vote details (257)
@awesomianist ·
In other words.. Moon.

I would be wild to see the transition of Steem into being a part Social Media part Exchange Platform. That'll be like day meets night and im sure brains will be blown.
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@blazing ·
having no fees would result in more adoption too as smt leading the way and going mainstream this too would attract many people to adopt it as quickly as possible
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@bromedya ·
Best Shared.. I share fun videos every day. Please follow me and like to my videos?
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@cguib ·
thanks for sharing.
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@chrisroberts ·
Thanks for clarifying! This is great (albeit a little confusing) news!
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@droucil ·
Do you have any idea when they will be available to be created and used?
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@cryptoctopus ·
SteemFest?!
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@droucil ·
Seeing as that is being said with a question mark I assume it's an assumption :P
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@fishyculture ·
OK, you have me excited and I only understood about 1/3 of what you said... lol!
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@flowily ·
Thanks for explaining :) It is kind of easier when someone writes in their own words, although I will also read whitepaper to get all particulars.  The only thing that bothers me, they did not make official release date :(
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@fun-along-theway ·
WoW !!! .. cryptoctopus .. THANK YOU !! - ))

My limited 'crypto-tech' knowledge, shy'ed me away from the white paper .. so i didn't know about the STEEM-DEX !!
.. so AMaZING !!! - )))

***" .. The sky is the limit now .. "***

.. i humbly .. disagree !!! !!!

***" The sky is NOW .. an INVITATION "***

lovelovelove )))
greb'Z )
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@gardenlady ·
Exciting times!  and thanks for pondering your thoughts outloud regarding traders!  Makes sense.
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@gniksivart ·
Thanks for sharing. I've been relatively underwelmed of the introduction of SMT, but with the creation of a decentralized exchange with the major player being steem. Well now that's something to get excited about.
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@haryormidei ·
Woow!!!! Thanks for informing us about this
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@hoodaim ·
I really like how the ecosystem of Steemit is developing. In the beginning,  it looked like very simple structure, but then with a time, ​ I learned how Steemit is well thought through. Now with smart tokens, ​it goes to the next phase, it gets a little bit more complicated​ and that opens​ new opportunities.
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@howtostartablog ·
I hope that's true. Hate paying fees to different exchanges just to get money in & out.
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@investwarrior · (edited)
i dont like idea of no fees, because will be many bots and abusers, right now in our market is guy who always sell and buy exactly 140 sbd for months, and nobody can do anything to him , and if it will be in bigger scale , people without robots will be doomed.
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@cryptoctopus ·
robots will be limited by their bandwidth of SP. All that bots can do in an exchange at the end of the day is increase liquidity, which is a good thing. I don't see how the 140SBD guy is doing something malicious.
πŸ‘  ,
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vote details (2)
@investwarrior ·
how is robots in exchangers limited by bandwidth of SP?
right now to exchange in steem market you dont need any sp as i know .
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@michelle.gent ·
$0.08
That guy is very useful. That bot regulates the rise and fall of Steem/SBD to stop abuse and Boom/Bust scenarios.

I like it... but I didn't always understand :)
πŸ‘  , ,
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vote details (3)
@investwarrior ·
because of him normal humans cant make money on boom and falls, because he undercut in seconds, plus in normal exchangers people can buy and sell for profits like in few minutes speculates, and here only for longterm .
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@itsgood2havefun ·
Hi #cryptoctopus so does that mean this will be good for businesses only and just end up as a buying and selling site, an online market
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@jamjamfood ·
Decentralization is the goal. We have to work on this to get rid of institutions, regulations and other obstacles. Considering that we have no fees: this will be a big incentive for the traders to join. $$$
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@joendegz ·
the future is block chain and we have to learn how to adopt to it or we fail like blackberry and nokia,
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@joshvel ·
This is a very clever idea...thanks for the innovations. Let Steem reach up to the moon!
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@journeyoflife ·
I'm liking this because it shows us that this platform has s lot of potential . Above the sky the heavens are the limit , good days are coming
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@magnata ·
I think everything that you offer us, will go to us only for good. Thank you.
πŸ‘  ,
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vote details (2)
@meesterboom ·
Wayhay, this puts a clearer slant on it. For a while I have thought a steem based DEX would be a great idea. Here's hoping it comes quickly!!
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@michelle.gent ·
$9.01
This is jaw-droppingly exciting!

I'm already thinking of ways to implement SMT with a business and it looks like there's more to come.

I think you've got it wrong, @cryptoctopus, the sky is not the limit... I'm pretty sure there's NO limit to this :)

Steem On!
πŸ‘  , , ,
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vote details (4)
@minnowspower ·
**Congratulations** @cryptoctopus
MinnowsPower listed your post "STEEM Decentralized Exchange - The Sky Is The Limit Now" as **one of the top 5 upvoted and commented posts of the day**...!!!

Exceptional article described SMT and it's features in a simple manner. Very useful content for Steemit community...!!!

**100% Upvoted** by @MinnowsPower

**MinnowsPower is not a bot, I am a Crowdfunding Hybrid**
One small **UpVote of Yours** build MinnowsPower and MinnowsPower will **Not Forget Your Support...!!!**
πŸ‘  
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vote details (1)
@musyawirwaspada ·
Very useful information. Thank for sharing @cryptoctopus
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@nashwildcard ·
Thank you for posting this. It's all new to me and I have much to learn. No fees would be wonderful.
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@ogochukwu · (edited)
$7.62
Hello @cryptoctopus

Just like I said in your previous post Last week, the SMT is going to open a whole new chapter for the Steem Universe.

A DEX will be awesome and I believe that it is better for it to be Integrated to Steemit.com just like the Market.

The idea of a No Fees has already given the DEX a huge headstart.

Steemit is growing at a fast pace, I no longer know what to expect, Everything is happening.

Shared on Twitter

@ogochukwu
πŸ‘  ,
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vote details (2)
@chronogn ·
Whoever gets to completing an easy to use decentralized exchange will win.
All the exchanges are getting screwed with KYC and AML requirements and we need a solution now!
πŸ‘  
properties (23)
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vote details (1)
@hebrew ·
$7.86
Steem is growing.  Itegration that doesn't cost $700 dollars per bitcoin (oops misquoted price) and then added fees on top (Yes, Blocktrades - YOU) would be nice.
πŸ‘  , , , , ,
properties (23)
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vote details (6)
@atta09 ·
$1.41
Thanks @hebrew
πŸ‘  ,
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vote details (2)
@atta09 ·
Thank you very much, , i like you 
Your are the best @hebrew
πŸ‘  
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vote details (1)
@dianclasher ·
i like your comment @hebrew.
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@droucil ·
$0.22
If BTC were to become worth half a million, the fees alone might cost just that xD
πŸ‘  
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vote details (1)
@ogochukwu ·
$1.51
Hello @hebrew

I checked out your blog and loved what I saw, can't believe I have not found you earlier.

@ogochukwu
πŸ‘  ,
properties (23)
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vote details (2)
@ogoowinner ·
$1.31
This is incredible.!! Thanks for making it easier to grab but I'm not fully understanding this yet. @cryptoctopus please would you mind answering my dumb question? 

After all these, are we still going have the steemit platform running?
πŸ‘  , , ,
properties (23)
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vote details (4)
@cryptoctopus ·
Hi! steemit.com is the social media website and it runs on a technology called "the steem blockchain". SMTs, decentralized exchange, etc. They are all added features of "the steem blockchain". Steemit.com will still run and be a social media for as long as the eye can see.
πŸ‘  
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vote details (1)
@olegw ·
Looks promising :)
Thank you for understandable explanation.
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@osopapa ·
Huh?
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@praise-eu ·
As a newbie we depend of you better informed bosses to dish out infos that will encourage  the people. Thanks.
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@progressivechef ·
This absolutely makes sense mate. With all the different SMTs that will be created, there must be an exchange platform created to exchange them. 
I am still reading the white paper bit by bit, there's really a lot of info there that we need to understand well.
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@redeauxtech ·
This would be awesome. I would be interested in creating a token. I have so many ideas for this.
properties (22)
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@rizwan ·
This is fantastic news for steem. The benefit of using a decentralized exchange is that there is no need to put any trust in the exchange platform itself, as the funds are held by the user in a personal wallet, rather than with a third party. Decentralized exchanges can also provide more privacy, while reducing the risk of server downtime, if only for those who are more tech-savvy.
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@rok-sivante ·
hmmm... *innnnnteresting...* :-)
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@shahzadhaneef ·
Steemit wark post uplode sharing thank you upvote
πŸ‘  
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vote details (1)
@shihabieee ·
thanks for sharing keep it up
properties (22)
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@silvia · (edited)
Nice, I like thank for sharing  @cryptoctopus
properties (22)
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@sponge-bob ·
$13.35
We will soon need all exchanges to be decentralized as China (or another country) creates their legal tender and closes websites (what are now exchanges) that deal in BTC, ETH, DASH and other soon to be illegal coins.  

We need a new exchange.  The bitcoin of exchanges.  One that has no owner, no location and can't be shut down.   I think bitshares is close but way too complicated for adoption  to take place.  Though it has gone up a lot since regulation hit some asian country recently.

Needs to be
"Hey send me $50 in steem."
"What's your  address?"
"@cryptoctopus."

"Did you get it?"
" Yeah, thanks."

Public, anonymous (as many accounts as you want), free (if possible).
πŸ‘  , , , , , , , , , , , , ,
properties (23)
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vote details (14)
@droucil ·
$0.24
Bitshares does still sound like the best option by far. It's just like you said, it needs a more friendlier approach for its users. Maybe when EOS arrives it will do just this. BTS still remains my #1 by far, with all it stands for.
πŸ‘  ,
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vote details (2)
@jimy74 ·
BTC is not an illegal coin, if you pay the government ... "License = corruption"
properties (22)
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@droucil ·
If you pay the government, in taxes you mean. But what about keeping the crypto not converting it back into fiat? Than they can't make you pay anything...
Crypto should be an investment for the future. Sadly it's currently still more of an exchange market to make a quick buck...
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@theguruasia · (edited)
$9.08
@sponge-bob,
Yeah I got your point! You mean exchanges build on top of the block chain technology! Yeah that's the most important thing also! We can't let stupid country regulations to ban exchanges! I mean exchanges, not ICO (it needs regulations)
One more thing, I want to buy STEEM via direct credit card payments! I hope STEEM dev team will think about it as well!

Cheers~
πŸ‘  , ,
properties (23)
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vote details (3)
@sponge-bob ·
$2.69
Via CC means Fiat to Crypto.  That is where the governments have their noses always poking about because that is where we give them control.   I am 100% off banks, debt, taxes, and outside the system.  

Leave the fiat to coinbase and let crypto be exchanged for crypto.
πŸ‘  , ,
properties (23)
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vote details (3)
@treemancliff ·
I agree about direct credit card purchases for STEEM ...
πŸ‘  
properties (23)
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vote details (1)
@steemwija ·
@cryptoctopus - Actually Sir, recently, I heard about The Steem Media Token (The SMT) a lot.. But, the thing is, i don't have mush knowledge about this. However, i am really interested to have  many more information regarding this topic.

 And also i think you are the  main source that i can have a better understanding on this. (I mean, to put a better foundation on the subject of SMT) So, i would like to follow your articles on this topic . 

And of course i am following Sir... :) Also, thank you very much for sharing these kinds of valuable posts, and we are expecting many more from you... :) Therefore, I wish to ReSteem your post.

+W+ [UpVoted & ReSteemed]
properties (22)
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@stnwllstrtgc ·
Thanks for the succinct explanation! Looking forward to the future of STEEM and crypto in general!
properties (22)
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@tajnost ·
steeeeem staaahp! we already have BitShares for all this >.<
properties (22)
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@tarekadam ·
$0.30
This is a great vision and makes a lot of sense. We have already a very well working internal market on Steemit.com and once we have SMT tokens a separate steem based exchange would certainly add value.
πŸ‘  , , , , , , , , ,
properties (23)
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vote details (10)
@thecryptotrader ·
$0.04
Damn,  it could be a real game changer in all the whole crypto world!  I'm rrally glad to be a part of this revolution.
πŸ‘  
πŸ‘Ž  
properties (23)
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vote details (2)
@theguruasia ·
@cryptoctopus,
According to your explanation, I just feel "**SKY IS THE LIMIT NOW**"! Yeah now it looks like Sky is the limit! You explained it very well! Thank you very much for providing such simple explanation about this complex scenario! Really appreciate your effort!

Cheers~
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@ultimatepeace ·
i remember when mobile cells were not introduced... communication was there but it was difficult....  since the cell phone has become an reality ... you can even talk to your boss while you are in the loo...in the same way a, DECENTRALIZED exchange surely seems to be the next stop for STTEMPOWER....
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@unlockrs · (edited)
$2.22
Perhaps I'm not understanding, but if IOUs are created, what entity is on the hook for making the IOU whole? If an IOU cannot be made whole, what parties will feel it? Further, how is liquidity created and maintained? Is liquidity maintained through the IOU mechanism?

Asking genuinely for my understanding. I really like where Steemit is going with ICO and token creation, but I can't wrap my head around the DEX.
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vote details (8)
@cryptoctopus ·
$0.22
Have you tried bitshares DEX? It shouldn't be too different. Basically, it's an exchange on the blockchain. Will all those tokens flying around, you need a way to exchange those tokens back to STEEM.

The IOU will have to be a promise from a third party. Let's say paypal wanted to have a USD IOU on the blockchain, the PAYPAL.USD token would be as valuable as the trust people have in PAYPAL to fulfill their promise.
πŸ‘  
properties (23)
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vote details (1)
@unlockrs ·
$0.89
That's helpful, thank you.  And no, I haven't tried BitShares, but I have traded on WAVES's DEX. It was very quick but I didn't really understand how I got the tokens I traded for so quickly (the WAVES UI/UX is not that intuitive to me so it's more my limitation than the tech). 

So from my understanding, there is still a party that is responsible for payment. Liquidity is provided for through a third party. So similar to a centralized exchange, you are still exposed to balance sheet risk in IOU. I think I need to research this more because I had envisioned that a true DEX you wouldn't have balance sheet risk at all. Again, maybe I'm not understanding correctly, but I appreciate you trying to help me.
πŸ‘  , ,
properties (23)
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vote details (3)
@vangelov ·
Amazing news.. Can't wait to see this rolling out
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