Case Studies

Decentralized exchange (DEX)

Problem:

Cryptocurrency investors prefer using centralised exchanges over decentralised exchanges (DEX), because the majority of DEXs are blockchain specific, and thus have a limited ability of offering a broad range of investor preferred cryptocurrencies.

Moreover, because users prefer the convenience of storing all cryptocurrencies in one spot, as well as having the ability to react to rapid price movements and trade quickly, they chose to leave their funds in centralised exchanges, thus exposing the safety of their assets.

Lastly, the adoption of DEXs have been undermined by regulatory bodies from various countries, because in the end, a central party was responsible for its operations.

Solution:

From the functionality of creating or wrapping tokens (m-BTC, m-LTC, m-ETH, etc.) and managing them together in the Mintlayer wallet, derives the possibility to enable peer-to-peer decentralized exchanges (DEX). Mintlayer is a perfect environment for users to safely store & trade their assets, all in a single wallet. Anonymously, while maintaining the ownership of their private keys.


In general, there are two different approaches for users to store their cryptocurrency:

Many investors treat exchanges as a bank, leaving their funds in custody, exposing them to possible censorship, hacking, fraud. Other users prefer to use a non-custodial wallet. However, while holding funds in an open source software is generally secure, it may cause inconvenience when dealing with other services, due to the time necessary to deposit and have the funds accredited. Also, users are often forced to switch between multiple wallets when dealing with several assets from different blockchains.

Mintlayer was designed to keep security in mind, without sacrificing convenience - a true middleground for both approaches. Users can send and receive multiple cryptocurrencies on a single wallet, in a single blockchain, while fees can be paid in any currencies they transact - a huge step towards mass adoption. Also, the wallet address might constitute a verifiable “identity” which allows to interact with Security tokens via ACL.

Finally and most importantly, users can execute peer-to-peer DEX transactions straight from their wallet, even with confidential transactions enabled. It is impossible to differentiate DEX transactions from regular transactions between wallets - they appear the same under blockchain analysis. Basically, Mintlayer users can safely store cryptocurrency assets from multiple blockchains while conveniently, anonymously and rapidly trading them in a DEX with a lower risk of funds loss.

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