merkleX offers decentralized, high performance, and low free trading for ERC-20 tokens. Our system relies on a new open protocol that we’ve developed and named the Decentralized Clearing Network, or DCN for short. The DCN is an Ethereum Smart Contract that holds funds, securely settles trades, and manages the on chain interactions between users and the exchanges. You can learn more on our blog.
The DCN is an Ethereum contract that provides exchanges secure, low cost on-chain trade settlement. Current Decentralized Exchanges (DEXs for short), create an Ethereum transaction for each trade. This is expensive, slow, and in some cases allows for front-running. The DCN allows our exchange to submit aggregated user trades to the Ethereum Network. This greatly improves efficiency and makes decentralized, high throughput trading a reality with today's technology. The aggregated trades are verified by the DCN against user constraints with a protocol similar to the lightning network.
The centralized component of merkleX accepts orders, computes trades, and collects signed user determined constraints. On an hourly basis, merkleX submits aggregated trades and signed user constraints to the DCN where settlement occurs.
The DCN allows merkleX to focus on stable, quality trading with low latency. Our exchange is not burdened with the overhead of securing a cryptocurrency vault, we are able to pass these savings off to the investor. Additionally, facilitating trades through aggregated transactions using the DCN means our exchange incurs lower Gas fees. Our fee structure will likely be based on volume, with a taker rate of 0.2% and maker rate of 0.1% paid in Ethereum.