Idex Review

What is IDEX?

IDEX is a hybrid liquidity decentralized exchange platform that combines the functions of centralized and decentralized exchanges with the features of a traditional order book and the security and liquidity of an AMM. The project claims to give its users the best spreads while avoiding failed transactions, easy providing of liquidity, limit and stop-loss orders.

Thanks to centrally managed trade matching and Ethereum transaction dispatch, the platform allows its customers to trade continuously by filling multiple orders at once without waiting for transactions to mine. It also provides immediate cancellation of orders without gas costs.

How does IDEX work?

Since traditional DEXes limit trade speeds by block times and update order books slowly while often being out of sync with the interface, filling multiple orders at once and submitting market orders is not possible. Moreover, the cancellation of each individual order costs gas. The use of trading bots, often regarded as a key factor in order book depth and liquidity is too expensive.

Maintaining the ownership of broadcasting user-authorized transactions, such as deposits and trades, IDEX sequences the dispatch of these transactions to the network. Thanks to this approach the project is able to provide the speed and user experience of a CEX with the combination of DEX’s security and auditability.

The smart contract of IDEX is designed in a way that only the exchange is authorized to submit signed trades to the Ethereum network, this gives it the advantage of controlling the order of the transaction process and separates the act of trading from the final settlement. Users’ private keys are simultaneously used to authorize trades in the contract while their exchange balances update in real-time. 

Once the transactions are authorized, they are passed to a transaction processing arbiter which manages the queue of pending transactions. By managing this order, the platform ensures that each trade is mined in the correct sequence and the contract balances are in sync with the exchange balances. 

Whenever a new order is submitted, the trading engine automatically matches it against the best combination of limit orders and pooled liquidity for the lowest-cost execution across all liquidity sources in real-time. Users can interact both with a swap UI and a traditional orderbook interface with the platform.

IDEX recently launched on Polygon, offering the same type of services to its users in an attempt to tackle the skyrocketing transaction fees faced by many. With the launch came incentives for new users such as IDEX tokens payout for liquidity providers, and a MATIC faucet available to those using the exchange, since the Polygon native token is being used as means of paying gas.

How to use IDEX?

The IDEX wallet support includes hardware wallets such as Ledger, as well as web-based wallet providers such as Metamask. The IDEX app can also be accessed with a Private Key/Keystore.

To trade on the platform, users need to deposit tokens to the IDEX app from their wallet and pay for the transaction fees on the network they use. 

IDEX fees include 0.25% taker fees regardless of the type of liquidity matched in a trade. In the case of limit orders, the whole taker fee is collected by the protocol, while when pool liquidity is utilized for a trade, 0.2% of the fee is sent to liquidity providers, and 0.05% is collected by the protocol.

The IDEX token

IDEX is the token ticker used by the project and has a total supply of 1 billion. Its finite supply prevents the devaluation of the coin through inflation. Holders are given the possibility to stake the token and get rewards equaling 50% of the trading fees. The platform rewards contributors who act as Validator Nodes by staking the token, since this way more liquidity is provided, and the volumes are increased. 

The more market makers and traders join the project and stake, the more the performance of the network improves as IDEX can scale through Layer 2 solutions. The platform also consists of Replicator Nodes – required to stake at least 10,000 IDEX via the IDEX network or wallet.

Is IDEX safe?

Originally founded in 2017 under the name Aurora, the platform was created by Alex Wearn, who has an impressive background in software development with his previous management roles including companies such as Amazon, IBM, and Adobe, and Philip Wearn – the co-founder of EtherEx. The IDEX team came up with the rebranding in 2019 along with the idea of developing the first real-time non-custodial exchange combining a CEX system for matching orders with decentralization.

IDEX audits can be found in the protocol dashboard on this webpage.

Partners 

A few months before the launch of IDEX v3, the company announced its partnership with Polygon aimed at providing the services available to its users on the Ethereum blockchain. The company claims the integration will make transaction costs lower by “10,000-100,000” times than what is typically experienced on Ethereum layer-one.

Another prominent partner of the platform is UpBots – an all-in-one platform for crypto trading, DeFi, forex, and commodities. The aim of this collaboration is to connect the worlds of DeFi and traditional finance.

What's next?

IDEX’s main focus for the future development of the network consists of bringing the project to more blockchains in order to reach more users, new assets, better accessibility, and adoption. The potential blockchains for such a partnership are described as having great security and speed, very cheap transactions, and high levels of general adoption. The team mentions there are currently only a few networks that fit their criteria but doesn’t go into details on which they are. 

The second big priority for the platform is Leverage since derivatives volumes are bound to eclipse spot volumes on decentralized platforms, IDEX sees itself as “positioned perfectly to become a premiere derivatives platform, specifically perpetual swaps”.

Other points of focus include faster deposits, the referral program, liquidity mining upgrades, introducing trading competitions, creating a fiat onramp, chart improvements, and a launchpad program.

Links

https://docs.idex.io/