Hi,
Can someone explain to me in simple bullet points how the decentralized exchange works?
1. Create an order in your wallet
2. XBridge relays it over our DHT network overlay to nodes on any chain
3. People's apps add your order to the order book
4. Someone accepts your order
5. Atomic coin exchange takes place (This is completely trustless, utilising OP_CHECKLOCKTIMEVERIFY)
I would like to add it to my thread (The DEX Thread). Actually, I already have added it, but I would like to elaborate on it there. I could not find a whitepaper.
As for weaknesses, I'd say that, from a trader's perspective, a weakness is that we can't support scalping and other fast-in-fast-out trading techniques without inducing risk. (We could, for example, build a slider that enables traders to accept orders from contracts with less than the "safe" number of confirmations. This would basically function as a filter on the order book, enabling "instant" trades in exchange for increased double-spend risk. Best used on small position sizes.)
Note: the Blocknet isn't just a decentralised exchange. That's just what we're bringing out currently. The Blocknet is infrastructure for the inter-chain era and the emerging "token ecosystem." We aim to provide monetised service-delivery from nodes on any chain to dapps on any other one. In this context, the decentralised exchange is our service-monetisation mechanism, and if we are successful, the exchange will be used mostly by machines.