Digital Assets may be a fairly new financial paradigm, but their adoption around the world has been overwhelming in more ways than we can list. As the market for these virtual commodities continues to grow, there’s an inevitable need for the creation of a robust trading ecosystem without which the entire industry would eventually fall into chaos.
Various networks exist to try and smooth out operations in the current digital assets market. Some of these networks and exchanges are actually doing a very commendable job of helping users realize value in their different crypto-driven endeavors. Nevertheless, it’s an undeniable fact that the market is still ridden with numerous problems. These problems range from price fluctuations and market volatility to considerable lack of security and transparency. DAEX promises to bring a lasting cure to these problems.
Table of Content
- What is DAEX.
- How Does DAEX Hope to Revolutionize the Crypto Market?
- An Overview of The DAEX Token.
- Why Does the Cryptocurrency Trading Industry Need DAEX?
- Future Plans For DAEX.
- DAEX ICO Summary.
DAEX is a blockchain-backed clearing service. It is an invention of the DAEX foundation (registered in Singapore) that was created to correct some of the flaws and cover some of the risks that hinder healthy development in the cryptocurrency industry. DAEX serves the entire crypto market including exchanges and individual crypto users.
DAEX is built upon the distributed ledger technology and is expected to restructure crypto-based transactions by decoupling assets and transactions as well as by enabling token-based authentication. Its clearing chain uses smart contracts with preprogrammed clearing and settlement rules to fully automate the clearing process and eliminate human interference with the process.
DAEX tries to provide a better infrastructure that incorporates the benefits of distributed ledger technology and the functional aspects of conventional securities markets.
DAEX contains all the notable features of traditional public chains such as transaction encryption, consensus mechanism, and privacy protection. It offers such services as identity authentication, asset registration, and mapping, payment and exchange of assets and other wealth management services.
While this system is fully compatible with the current trading infrastructure, DAEX is unique in that it provides a CaaS (Clearing-as-a-Service) solution. By coupling CaaS with decentralized digital assets, user-friendly options, and smart features, DAEX hopes to create a better crypto trading environment.
DAEX takes control away from digital asset exchanges. It does this by breaking crypto transaction into five distinct steps: authentication, registration, trade matching, clearing, and settlement. Through DAEX, exchanges only match the trade while the DAEX Blockchain facilitates everything else.
The DAEX Blockchain aka the DAEX Clearing Chain sits at the core of the DAEX ecosystem. It’s deployed on multiple nodes and has several components.
DAEX Clearing Contracts
A clearing contract on DAEX is a smart contract that has all the rules for clearing and settlement preprogrammed into it. This clearing contract takes care of the entire clearing and settlement cycle once a trade has been matched.
After trade matching occurs in an exchange within the DAEX ecosystem, the transaction is forwarded to the clearing chain. A clearing contract is then drafted for that particular trade. This clearing contract first validates the trade, then goes through the DAXE consensus mechanism and finally updates the matching accounts on the ledger.
Illustration of how the clearing works. Source:DAEX Whitepaper
A Specialized Consensus Mechanism
DAEX uses a specialized consensus component based on the Proof of Stake (PoS) mechanism. A Clearing Value Factor (CVF) incentive is integrated into this system to create a CVF-PoS hybrid called the Accumulative Signatures for PoS (ASPoS) consensus mechanism.
ASPoS is a high-performance consensus mechanism the avoids centralization and expands the network effect at a reasonably low network cost. This mechanism of consensus allows anyone to become a regular node in DAEX thus everyone can be a witness of clearing. The stake of each node is based on the amount deposited as well as the level of activity and participation.
The CVF generates a verifiable random function (a random source number that determines which node creates a new block). The randomness of this function creates unpredictability and thus protects the ecosystem from DoS attacks. The system also identifies and punishes processes that might lead to mistakes in consensus.
A Dedicated Clearing Account
Every DAEX user gets a dedicated account for registering assets, keeping asset balances and maintaining their clearing history.
The DAEX Clearing Protocol
The DAEX Clearing Protocol defines how the DAEX clearing service communicates with other exchanges. The protocol employs various techniques to ensure privacy and security are upheld at all times.
The DAEX Wallet
The DAEX wallet is a distributed and unmanaged wallet that offers the user full autonomy over his/her digital assets. Getting a DAEX wallet is a stepwise process as follows:
- The user completes the KYC process
- The user is registered on the DAEX clearing chain
- The user gets a unique DAEX chain public address
- The user’s digital assets are managed through the address
- The digital assets are used to trade in various participating exchanges
- A DAEX wallet is generated for the user. This wallet comes with a 3-part private key to enhance security.
The DAEX wallet supports multiple variants of cryptocurrencies and is the only way for users to participate in the clearing process. It additionally provides users with a secure means for storing and using their digital assets.
Wallet functionality. Source: DAEX Whitepaper
All exchanges within the DAEX system will use the DAX token. This utility token will enable users to record and validate transactions. Practical uses of the token could, for instance, include paying for clearing, trade matching, and asset settlement.
A holder of the DAX token is a part owner of the DAEX ecosystem. Users gain token rewards for opening accounts and for inviting other people to open DAEX accounts.
Holders of the DAX token are assigned value through a Clearing Value Factor. The value is based on the following factors.
- Clearing value: the clearing contribution of a user in terms of accumulated contract numbers and the overall clearing quantities.
- Capital Value: the total value of a user’s digital assets within the clearing ecosystem based on elements such as market value, ranking, daily transaction volume, and circulating ratio.
- Transaction Value: the transaction value of a user based on such factors as periodic peak, trade components, clearing channels, and transaction volumes.
- Active Value: A user’s clearing activeness profile based on trade influence ability, clearing participation time as well as new customer development.
- Identity Value: A user’s identity level based on participation in business, debt ratio and age of their DAX coins among other things.
As of August 31, 2018, the DAEX token had been listed in various exchanges including Tokenomy, XBrick, Allcoin, INDODAX, LBank, BCEX, and SEADAX. As of August 31st, the token’s performance was quite strong with over 3,000 addresses holding DAX tokens and over 370 million DAX tokens in circulation. Over 1.3 billion of the 2 billion DAX tokens are already distributed for the main net.
There are obvious advantages of using such distributed exchanges as DAEX. BitShare and EtherDelta are some of the other notable distributed exchanges. However, most of the other distributed exchanges come with several demerits particularly with regards to flexibility, liquidity and matching speed. However, DAEX plans to create a network that overcomes these challenges and offers the following additional benefits.
DAEX provides A Secure Space for Crypto Trading
- Exchanges that wish to participate in the DAEX ecosystem are carefully vetted and must meet a set of minimum requirements in business and technology
- All assets are held in blockchain. The exchanges do not hold the assets but merely facilitate matching of trades
- Only the user can authorize the movement of his/her digital assets
- A multi-part private key secures the DAEX wallet
- Clearing contracts, blockchain, and the DAEX clearing protocol guarantee security, privacy and accurateness of asset clearing and settlement.
DAEX Provides A Trustworthy Environment for Traders
- DAEX has decoupled trade and clearing to guarantee the safety of a customer’s trading assets
- The participating exchanges contribute an insurance fund to safeguard user assets
DAEX Is an Open Ecosystem
- Any willing exchange can participate in the ecosystem that DAEX has created.
- The products and services on DAEX are accessible and can be used by all
- DAEX plans to include a host of other value-added services such as crypto derivatives trading
The Solid Infrastructure Creates an Excellent Value Chain
- DAEX provides an ecosystem in which the downstream and upstream architecture of crypto transactions are optimized.
- DAEX improves the entire chain (including identity authentication, asset registration, asset clearing, settlement and everything else in between.)
- DAEX consensus mechanism ensures that all participants witness value.
CaaS Is Objective and Transparent
- By using Clearing-as-a-Service (Caas), DAEX provides a platform that doesn’t favor any organizations or particular groups of individuals. The ecosystem is thus unbiased, transparent and objective.
DAEX Is Quite Effective in Listing New Digital Assets
- The job of DAEX as a clearing service is to list new clearing products thereby allowing the participating exchanges to trade.
- The DAEX wallet simplifies trading in new cryptocurrencies for both the user and the crypto exchange.
- By expediting the new product listing work through DAEX, exchanges can compete better in the rapidly growing digital assets industry.
- The token reward system is a good incentive for new users to join DAEX.
- The DAEX wallet is a multi-asset wallet that significantly lowers the delivering cost.
- By separating clearing from trading, DAEX allows users and exchanges to become more productive and more focused on their key
DAEX has made continually made efforts to establish a name for itself in the industry. The efforts of this project have been successful in securing strategic partnerships with such firms as HyperQuant, BUGX, IAME, and Sophon Capital Community. DAEX hopes to make even more and bigger alliances in the future.
DAEX plans to open up the market in Asia and penetrate such countries as Singapore, Thailand, Australia, Indonesia, and Russia.
In its first phase of development, DAEX will be a clearing service for crypto trading. During its second development phase, DAEX will also be used for clearing in margin trading and short.
DAEX hopes to grow into a clearing service for crypto derivatives.
In future DAEX will provide smart, inclusive financing whereby it’ll develop a new way for users to collateralize some of the highly liquid digital assets.
Token Sale Date: Starts: 9th September 2018. Ends: 14th September 2018.
Buy With: ETH
Price: 1 DAX=0.07 USD
Hard Cap: 10,000 ETH
Soft Cap: 7,000 ETH
KYC: Yes, (17 August 2018 to 14th September 2018) visit https://www.daex.io/kyc
Restricted in: USA, China
Want to learn more about the project? Check out our review of the project here.