Introduction

Serum is a decentralized exchange (DEX) platform created by the same team that brought us the popular cryptocurrency derivatives exchange , FTX .

With the launch of Serum, the team hopes to test the limits of existing DEXs by providing a fast, efficient, permissionless, fully on-blockchain cryptocurrency DEX.

Features

The Serum Project is the world’s first fully on-chain decentralized cryptocurrency exchange, with cross-chain trading in full confidence.

The Serum DEX provides its clients with fast, efficient and permissionless exchanges between digital assets across chains.

On Serum, traders can confidently trade cross-chain assets (e.g., BTC to ETH or any other ERC-20 token and vice versa).

The project aims to offer a more intuitive order book, with full liquidity and cross-chain interoperability. It aims to solve the fundamental problems appearing in existing DeFi: slowness, high price and cross-chain interoperability.

Completely Decentralized
Most DeFi protocols rely on a centralized oracle – often at the most crucial step, Serum does not.

Cross-chain support
BTC is not on Ethereum, so how can a smart contract know or influence its transfers? Serum allows you to trade assets confidently between chains, without any centralized parties.

Complete Order
Books Serum supports the best centralized exchange technology. Serum’s order books are decentralized, automated and entirely based on limit orders.

Speed
​​Serum carries out transactions that cost only a few cents and are completed in seconds.

aldrin dex

Creation

Serum was founded by Sam Bankman-Fried and the team at FTX Exchange in August 2020. Sam is the inspiring entrepreneur and active member of the DeFi community who founded the cryptocurrency derivatives exchange FTX in 2019. He is also the CEO and founder of Alameda Research, a leading cryptocurrency liquidity provider, and was a trader at Jane Street.

sam bankman fried

While serving as CEO at FTX Exchange, Sam and other members of the FTX Exchange team began thinking about a DeFi derivatives exchange protocol. They knew that such a protocol could not be built on Ethereum at the moment, given the intensive network characteristics they wanted to give it.

They looked at several different blockchains and ultimately settled on Solana (SOL), a high-performance blockchain designed with efficiency in mind.

When creating Serum, Sam and his team partnered with many leaders in the cryptocurrency industry, including the founders of Multicoin Capital , TomoChain , Compound , Kyber Network , and many more.

The SRM token

SRM is the native cryptocurrency of Serum DEX and forms the backbone of the Serum ecosystem. SRM is natively on the Solana blockchain as an SPL token and is cross-listed on Ethereum as an ERC-20 token.

Fee reduction

The SRM token can be used to pay fees on the Serum platform. By simply holding the SRM token, traders get a 50% discount on all transaction fees. This is a technique similar to that used by Binance for its BNB token .

Staking Rewards

SERUM nodes perform important actions on the blockchain, such as providing blockchain histories for cross-chain settlement validation.

Each staking node requires at least 10M SRM, and each node must also contain at least 1 MegaSerum (MSRM) which equals 1M SRM.

Serum Node Operators receive rewards in SRM based on their node’s performance. Users who do not have enough SRM tokens to host their own node can bid on another node to receive a fraction of the rewards.

Node leaders receive 15% of the total node reward, with the remaining 85% split proportionally. Each node receives a base of 2% APY per year on its holdings. Each node receives another 0% – 13% per year depending on its performance. Each node will also potentially receive rewards for success in specific challenges and tasks.

Burn tokens

SRM tokens are regularly burned, that is: removed from circulation forever. More than a million SRMs have already been burned in 2021.

Governance

This feature is not yet active, but SRM token holders will be responsible for setting some important parameters (e.g. fees) and will have governance of all net revenue generated by the platform.

A node will be able to propose a rule change (e.g. fee change) and this will cost 50,000 SRM, which will be deducted from the node’s global asset pool. If the rule change passes, these 50,000 SRM are returned; otherwise, they are burnt. For a proposal to be adopted, it must receive a minimum of 60% of the total SRM wagered worldwide.

Distribution of tokens

The total capped supply of $SRM is 10,000,000,000 (10 billion) and 90% of all SRM tokens are designed to be held long term or locked.

This helps ensure that the team is here for the long haul, although it also scares off investors.

srm distribution
srm repartition

Decentralized exchange platforms

Serum DEX is a protocol that can be used by any developer to create a decentralized DEX. The non-exhaustive list of DEX built on Serum is available on this portal .

srm dex

Analysis

Most Web 3.0 sites that offer SWAP can integrate Serum and take advantage of the order book to optimize user transaction costs.

The massive amount of token stranded and the team’s choice not to fund the project with inflation but on the actual use of Serum is both ambitious and risky. The success of this innovative project and the increase in the price of the SRM token is totally dependent on the amount of transaction carried out through this DEX.

It is possible that a game on Solana, such as Star Atlas , exploits Serum and participates in the adoption of this project. Furthermore, in a bull scenario, Serum could serve as a liquidity infrastructure for the DeFi ecosystem on Solana .

serum ecosystem correlation

Note that Serum is currently blocked in the United States, because its use does not respect the KYC. And you, what do you think of decentralized exchange platforms?

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Sources:

https://www.publish0x.com/crypto-truth-lexicon/top-things-you-should-know-about-serum-srm-xwnprky

https://projectserum.medium.com/an-ultimate-vision-for-serum-473a16e77201

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