This page explains what the OpenDAX v4 platform means from the users' perspective.
OpenDAX V4 is a simple and clear thus powerful and reliable crypto trading platform.
Beyond this, OpenDAX V4 allows an exchange to embrace liquidity from multiple blockchains and exchanges with a connection to the Yellow Network.
- You can sign up to the platform via email or Google account, and get access to trading by connecting your reliable third-party crypto-wallet.
- You don’t need to pay blockchain fees for every transaction, you just pay fees when depositing and withdrawing money from the vault smart contract. All trading activities occur off-chain but are granted by blockchain security.
- You are not limited by the platform user’s request, the platform collects liquidity from the broad network of connected applications (in the Yellow Network).
- You don’t need to learn complicated concepts to get familiar with trading on the platform, it is made simple, albeit powerful. Examine it!
The main idea behind OpenDAX liquidity aggregation is to create a dimension that connects different blockchains and applications in efficient and secure off-chain trading.
This is done by leveraging state channels, Web3, and DeFi blockchain technologies.
State channels is a technology that allows executing transactions off-chain thus without blocks building and spending time and fees on it. At the same time, state channels remain secure as blockchains on top of which they are built.
Imagine two people, who have balances on a blockchain and want to send some crypto one to another (for example, in trading). Each transaction will take time for building a new block and storing it in the blockchain. And the faster it must be built, the more expensive it will be for the users.
But if we store on the blockchain a so-called Smart Contract that holds the users’ balances state, and then all the transactions will occur off-chain, they will not be charged for these transactions. Only when one of the users wants to withdraw their money, the smart contract will update the state on the blockchain and the fee will be charged.
So, users go to a smart contract and lock some assets on it.
- They pay the blockchain fee.
- The users make transactions between them.
- They don’t pay blockchain fees and transactions are not stored in blocks, thus they don’t consume much time.
- When one or both users decide to withdraw their money, they send to the smart contract the corresponding state of the balances. Both users approve that the state is fair. Smart contract unlocks the corresponding amount on the blockchain.
- The user pays the blockchain fee.
That is a State Channel: a place where transactions occur off-chain and only states get updated. It grants blockchain-level security (as its smart contract is recorded on a blockchain) but allows superfast and low-cost transactions.
Web3 is a new generation of the Internet: more interactive, private, and decentralized. In Web3, for example, you don’t need to share your privacy but just share public keys of your account, which is cannot be compromised as it is.
MetaMask is a crypto wallet that allows a user to store and transact Ethereum or any other Ethereum-based (ERC- 20) tokens. And allows a user to authorize to different Web3 applications — such as OpenDAX.
The user may install MetaMask browser extension or mobile app to use it for authorizing, depositing, and withdrawing from OpenDAX platform trading channels. OpenDAX here does not store the user’s email, name, phone number, or any other personal information.
Thus, in DeFi via Web3 there is NO WAY some hackers break into the system and steal the money and credentials of thousands of users, as happens with centralized platforms from time to time.
Decentralized finance does not rely on centralized intermediaries. An OpenDAX can serve as a portal to shared liquidity in the Yellow Network that unites many independent exchanges. Also, OpenDAX grunts fund security via dedicated smart contracts.
OpenDAX is a way to connect to the Yellow Network — the system of nodes (servers) that accumulate and share liquidity over various exchanges and blockchains, that are connected to the network. In other words, orders on an exchange are reflected on every other connected to the initial exchange trade place. Thus, users have access to the best prices and amounts of orders in any market.
Logs in via own email and connects crypto wallet
Registers only public address of the wallet, with no control over user funds
Deposits to be able to trade
Locks funds on the on-chain custody smart contract, and updates the corresponding balance in the user interface
Seeks for trading opportunities
Fetches liquidity from connected exchanges
Creates an order
Publishes the order, making it available over partner exchanges in the Yellow Network
Provides off-chain trades by updating balances (state) in the state channel (between exchanges) and custody contract
Withdraws crypto back to the crypto wallet
Updates the smart contract balance which sends crypto to the wallet address on-chain