What is AirSwap?
AirSwap is an exchange for ERC-20 tokens. It is decentralized in nature and makes use of both on-chain and off-chain protocols. The decentralized nature of the exchange means that each transaction is moderated by a smart contract rather than a central authority and ledger. AirSwap uses a peer-to-peer trading model, called the Swap protocol to replace conventional blockchain order books. The Swap protocol ensures that tokens are instantly swapped between parties without the possibility of a third-party accessing it.
This eliminates scalability, latency and running issues on the part of miners and order book operators. Traders are connected offline to make the exchange faster than its contemporaries. Other exchanges depend on the blockchain to proceed with orders and to propagate information which slows the process down. This essentially means that transactions are processed faster on AirSwap than other decentralized exchanges. MetaMask or Ledger affiliated wallets must be used to execute transactions in a peer-to-peer manner. AirSwap is based on 4 key components.
The Key Components of AirSwap
The basic idea behind off-chain trade negotiation is to reduce the workload on the blockchain. A maker is responsible for providing an order and a taker is responsible for filling that order. Negotiations take place between both parties and once this is done, the smart contract is called by the taker and the trade is complete.
Peer Protocol – The peer protocol is a platform for communication between maker and taker. The communication process is off the chain.
Indexer Protocol – This too is an off-chain service. An indexer is responsible for aggregating and matching the trading intent on the part of both the maker and the taker. Once a match is found for a taker, negotiations take place between both parties. This order is then filled on a smart contract when an agreement is reached.
Oracle Protocol – An oracle is an off-chain service which is responsible for providing information to takers and makers with respect to pricing. Both the maker and taker are entitled to ask the oracle for a price suggestion which seems fair. Negotiations can then take place between both parties, and a conclusion reached.
Once negotiations between both parties have taken place, a smart contract is called to either fill or cancel the order. These contracts and conditionals and are written in solidity to ensure privacy.
AirSwap Token (AST)
AST is a token native to AirSwap. It costs approximately 0.25 USD per coin and has a market cap of $37 million USD. AST is of great use to AirSwap users. With the growth of the platform, liquidity will increase and so will the demand for AST. AST is not like any other native token and is not used as an exchange fee. Using the indexer, traders can add their intent to trade to the index. Negotiations can then take place among interested parties. An amount of 100 AST is locked when users trade on AirSwap. Users can add ‘X’ number of trade intentions (specified as ‘intent to trade’ on the site) to the indexer. The lock amount is then returned after 7 days, as these rights exist for a week at a time. This essentially means that there is no transaction fee cut, as the locked amount is returned to the maker. Zero transaction fees is a huge plus. AST also allows traders the power to vote and manage the roles of oracles accordingly. The more AST a user holds, the more power he/she has during voting.
AST is an ERC-20 protocol based token and can be stored on any wallet that provides support for such coins. Hardware wallets present the most secure option, and are readily available on the market. Ledger Nano S and Trezor are the best hardware wallets and can be used to store AST via the MyEtherWallet interface. Other desktop and mobile wallets like Jaxx and Coinomi are worth taking a look at.
The AST token is not available on a large number of popular exchanges yet. Of the few exchanges that support the purchase of the token through token-pair trading, Binance is the most popular. AST/BTC and AST/ETH trading pairs are supported on Binance. Gatecoin, Liqui and Huobi are a few other exchanges that allow its purchase. Some exchanges provide the provision of a wallet. Although this may seem tempting, users are advised to never store their coins online.
The video below serves as a guide to using AirSwap.
Featured Image: twitter