Bonfida: A DEX Supplement

Bonfida (source:mobile.twitter.com/bonfida)

With extensive experience as an electrical/software/coding engineer along with having a diverse financial background, Thomas Wettermann’s areas of interest include Machine Learning (ML), artificial intelligence (AI), and Financial Technology (FinTech). For the past few years, Thomas Wettermann has focused on the underlying technologies that support and promote all phases of cryptocurrency and metaverse ecosystems.

What is Serum?

Serum is a decentralized exchange (DEX) and ecosystem that provides lightning-fast transactions per second (TPS). And, it achieves these transaction speeds with very low gas or transaction costs.

Serum is an open-source, permissionless on-chain platform for trades to take place. Trading is completed utilizing smart contracts on the Solana network instead of being done on a centralized platform. Importantly, Serum does not require that a third party retain control over private keys, trading parameters, user information, or fund security.

With Serum, users can exchange any type of cryptocurrency for another without having to go through any Know Your Customer (KYC) procedures.

How does it achieve such cost-effective transaction speeds?

Serum is based on the Solana decentralized blockchain architecture.

Solana is an extremely fast and secure, open-sourced blockchain. It differentiates itself from other blockchains by processing transactions as they arrive in the network, rather than processing these transactions in a block-by-block fashion.

To achieve its processing rates, Solana utilizes a novel blockchain structure that implements both a Proof of History (PoH) coupled with a Proof of Stake (PoS).

Since its initial release, Solana’s price has been nothing short of meteoric, hitting an all-time high of $256 last November. With a market cap of just over $36 billion, Solana now ranks in seventh place among the largest cryptocurrencies by total value.

Solana has been placed into a category of potential Ethereum killers, shared by other smart contract projects such as Binance Smart Chain, Cardano, and Avalanche.

The high throughput that Solana achieves through its innovative ecosystem makes it ideal for decentralized applications (dApps) like the Serum DEX. Simply put, it offers a more scalable platform with lower transaction costs.

What is Bonfida?

Bonfida is a decentralized non-custodial exchange built on the open-source Serum trading protocol. It is, therefore, powered by the Solana blockchain.

According to the Bonfida Whitepaper, Bonfida provides a full product suite that operates as a critical link between Serum, Solana, and the growing user base that is actively trading on the Serum DEX.

As stated, Bonfida’s long-term goal is to remain the flagship product of the Serum Graphical User Interface (GUI), which is illustrated below.

Bonfida Graphical User Interface (GUI) (source:bonfida.org)

Bonfida’s platform is engineered to include a backend structure that stores all Serum on-chain transactions. This backend allows Bonfida to provide data through a REST API. A service that has been adopted by key crypto exchanges, such as CoinMarketCap and Coingecko.

Recently, the Bonfida API has seen requests increase by more than 25% week over week. And, it currently processes more than 6 million API requests per day.

Going forward, Bonfida has lofty engineering ambitions to incorporate the following additional features. Bonfida plans to offer more advanced on-chain order types. Currently, Bonfida offers limit-type orders and market-type orders. However, Bonfida plans to add such advanced order types such as profit and stop-loss orders. It also plans to add additional on-chain and off-chain order types, but this would require traders to stake their FIDA holdings (the Bonfida token) to be able to use the feature.

In addition, Bonfida plans to enable order placements via the very popular TradingView charts that are developed with on-chain data. TradingView combines real-time charts, technical indicators, cross-platform alerts, and a social network. All of these offerings are available via a web interface, dedicated desktop app, or mobile and tablet applications. TradingView is the leading trading network of over 30 million traders and investors.

Bonfida also has plans to build out two trading modes: advanced and basic. In the advanced trading mode, users would be able to experience the current trading mode with more advanced features like Bonfida bots and advanced order types. The Bonfida basic trading mode would be focused on the convert function. It would offer any type of charts or advanced order types.

Conclusion

Because of its speed and efficiency, Serum will continue to see growing developer adoption as it moves up the ranks of top DEXs. Serum is unique in that it is a DEX that offers several competitive advantages including cross-chain transactions and open books. And the addition of Bonfida will offer even more competitive advantages not yet seen in a DEX.

All the views expressed on this site are those of Thomas Wettermann and do not represent the opinions of any entity with which Thomas Wettermann has been, is currently, or will be affiliated.

Trading digital financial assets such as cryptocurrencies can carry a high level of risk, and may not be suitable for all investors. Before deciding to invest, purchase, and/or trade cryptocurrency you should carefully consider your investment objectives, level of experience, adversity to risk, and volatilities. The possibility exists that you may sustain a loss of some or all of your initial investment; therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with cryptocurrency trading, and seek advice from a qualified and independent financial advisor.

Thomas Wettermann is not an independent financial advisor. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as a general market commentary of Thomas Wettermann and does not constitute investment advice. Thomas Wettermann will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All opinions expressed on this site are owned by Thomas Wettermann and should never be considered as advice in any form.