New UMI transaction type. Everything you need for decentralized exchange

The realm of DeFi (decentralized finance) and DEXs (decentralized exchanges) as its significant part have existed for quite a long time; however, practically all the popular platforms are now using the same set of tools. We decided to follow a different route and develop our unique decentralized exchange solution: a new mempool for atomic exchanges within the UMI blockchain and a new transaction type called “exchange”.

The “exchange” transaction type allows for creation of transactions to directly exchange various types of crypto assets directly within the UMI blockchain. For example, your can exchange UMI for GLZ, or GLZ for uBTC (a synthetic bitcoin that will be added into the blockchain later). Essentially, within the UMI network, you’ll be able to work with any tokens, whatever thei might be in the future.

1. First, the maker specifies the wallet address and the number of coins to send, as well as the address and the amount of any other crypto assets they would like to receive in exchange. And then clicks on “Publish transaction in mempool”.

2. The taker then chooses the transaction they need from the mempool, adds their wallets’ addresses for the respective coins/tokens, signs the transaction with their private key (using their mnemonic phrase), and then sends it into the network.

When the transaction is successfully confirmed, it is written into the additional storage, and a master node creates two surrogate transactions in the main blockchain: exchangeWitness.

In other words, an “exchange” transaction is similar to a limit order, with the UMI mempool acting as the order book. Consequently, the UMI network itself becomes a full-fledged decentralized exchange.

We would like to note here that to create the new mempool, we had to create a new protocol to synchronize it both ways. This was needed because atomic swaps, among other things, will also become the foundation of the future integration of farming and liquidity pools.

We have also provided for decentralized NFT trade. We’ll get into the details on that in our future posts.