What is the difference between decentralized exchange Oikos?

Blockchains and cryptocurrencies were envisioned as community-oriented open-source initiatives where the participants of a decentralized network have the power instead of a central authority. This has held true with the exception of dev teams that still have a significant say in the project. Often times blockchains have a leader that everyone believes in and follows, limiting the effects of decentralization.

A truly decentralized exchange works in a distributed way through a blockchain, with orders and information routed in a peer-to-peer protocol. This way, you are entrusting a system of hundreds of independent nodes instead of a single centralized entity, like an exchange.

On January 10th 2018, Kraken a fairly big centralized exchange went down for what was promised to be a 2–3 hours of maintenance work. This turned out to be untrue and 40 hours of darkness followed. Maintenance work itself is not a problem, as it was actually needed to upgrade their trading system. However, the fact that everyone's funds are solely controlled by Kraken should be a troubling. The private key to access all your cryptocurrencies is not with you but with them, meaning that if exchange goes down or is breached, all your funds are gone. Since cryptocurrencies are highly volatile and listed on hundreds of secondary markets, a 40 hour downtime means major losses for the user in terms of opportunity costs.

Public-key cryptography is great — no doubt about it, but it also has one major weakness — once your private wallet key is compromised your funds are gone, forever. If a single exchange controls billions of dollars in funds and the keys to unlock them, it becomes a huge target for those wanting to abuse the system.

Traditional decentralized exchanges, meaning those that run on top of the Ethereum network (Airswap, Raiden, Etherdelta) use smart contracts or a combination of smart contracts and payment channels to facilitate the trade of cryptocurrencies. There is no middleman or single trusted entity involved and you trust the immutable and decentralized aspect of a smart contract. At Herdius we take a different approach and create our own blockchain that acts as a transaction layer on top of all chains. This not only means that we are blockchain agnostic and future-proof, but that we are also faster and easier to use.

Now, most decentralized exchanges face difficulties with liquidity. So with this article you will have different thoughts. With today's article, I want to send you a very interesting project with that great decentralized exchange, Oikos!

Oikos is a decentralised synthetic asset issuance protocol built on Tron. These synthetic assets are collateralized by the Oikos Network Token (OKS) which when locked in the contract enables the issuance of synthetic assets (Synths). This pooled collateral model enables users to perform conversions between Synths directly with the smart contract, avoiding the need for counterparties. This mechanism solves the liquidity and slippage issues experienced by DEX’s. Oikos currently supports synthetic fiat currencies, cryptocurrencies (long and short) and commodities. OKS holders are incentivised to stake their tokens as they are paid a pro-rata portion of the fees generated through activity on Oikos.Exchange, based on their contribution to the network. It is the right to participate in the network and capture fees generated from Synth exchanges, from which the value of the OKS token is derived. Trading on Oikos.Exchange does not require the trader to hold OKS.

• Price data is obtained via multiple trusted sources and aggregated to create a robust price oracle mechanism
• Developer tools make it easy to create applications leveraging Oikos services
• Trade over 30 different Synths from various categories
• Join liquidity pools to collect fees on TRX-TRC20 pairs. Trade TRX for any TRC20 without wrapping.
• Liquidity-sensitive automated pricing using constant product formula.

Trading on Oikos.Exchange provides many advantages over centralised exchanges and order book based DEX’s. The lack of an order book means all trades are executed against the contract, known as P2C (peer-to-contract) trading. Assets are assigned an exchange rate through price feeds supplied by an oracle, and can be converted using the Oikos.Exchange dApp. This provides infinite liquidity up to the total amount of collateral in the system, zero slippage, and permissionless on-chain trading.

Oikos has already delivered one of the most complex and useful protocols built on Tron to date. But the potential for censorship-resistant synthetic assets is still largely untapped. Further improvements to the mechanism as well as functional upgrades and new Synths will vastly increase the utility of the platform. Movement to a decentralised governance process will also reduce systemic risk and increase the long term viability of the project.

You can find out more with links to the project below:

• Website
• Litepaper
• Twitter
• Telegram
  Author: tiecthemmgi
  Bitcointalk profile link: https://bitcointalk.org/index.php?action=profile;u=2721711