Serum: A Lightning-Fast, Efficient DEX

Serum Logo (source: crypto-economy.com)

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. 

Introduction

Over the past twelve months, Decentralized finance ('DeFi') has seen explosive growth with DeFi holding an all-time high of $100B in cryptocurrencies last August.

To support this continued growth, DeFi developers are looking for alternatives to Ethereum, with is experiencing some difficulties. Ethereum, once the dominant blockchain with most DeFi developers, is starting to lose its market share dominance. What was once 100% of the DeFi market, Ethereum’s market share has now fallen to around 70%.

Serum, a unique and powerful Decentralized Cryptocurrency Exchange (DEX), is strategically positioned to further erode Ethereum’s DeFi market share.

What Is a Decentralized Cryptocurrency Exchange (DEX)?

A “centralized” cryptocurrency exchange allows buyers and sellers to exchange cryptocurrencies. These exchanges are “centralized” because they rely on a middle man or third party to process and manage transactions between buyers and sellers. All parties to a transaction rely on and must therefore trust this middle man to properly handle their currencies.

Unlike a “centralized” exchange, a “decentralized” exchange (DEX) avoids the third party or middle man altogether. A DEX establishes a buyer-to-seller or a peer-to-peer trading platform that enables the exchange of one type of token (Bitcoin) for another type of token (Ethereum).

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.

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.