Distributed exchange in Ethereum?

Are there any examples of a distributed exchange built into an Ethereum contract/app? If not, is it likely that Ethereum can support such a novelty :)


  • gerbrandvdgerbrandvd Member Posts: 10
    edited December 2015
    A distributed exchange would mean some sort of currency or token system on Ethereum. Fortunately, that's almost the 'hello world' of any blockchain technology :smile:
    In the tutorial on solidity, one of the programming languages to develop smart contracts there's an example: https://ethereum.github.io/solidity/docs/simple-smart-contract/ Everyone with an ethereum-account can then buy and sell these tokens using that smart contract. The ownership of tokens is tied to an ethereum account (which is private) and tokens can transfer from one account to another.

    By definition smart contracts can't communicate with the outside world by itself, they have to be accessed by the outside world. So, to get information in or out the ethereum platform you'd need an application running to act as a gateway between the ethereum network and the outside world. In case of a token system, such a gateway application would be an Exchange.

    So no the following questions:
    • Who owns the initial tokens? Is that you? Or do you offer them to a group of people?
    • Do your token have a fixed or guaranteed value in for example Euro or Bitcoin? If they have a fixed value that would mean there's an exchange that guarantees to buy and sell tokens at that price. Naturally that'll have to be you too, who else would want to buy this new token? Everyone who 'buys' your tokens has automatically a debt to you.
      Similar to gift coupons, or old-fashioned money itself, that can be exchanged for goods or money. In a way your a bank, so you'd need a banking license to do that. Just as any organizations that offers gift coupons needs a bank license from financial regulator.
      You could run multiple instances of your exchange on any cloud platform to be technically distributed, but you'd still be the legal point of failure.
    • If your tokens do not have a fixed/guaranteed value this means the price is driven by market. You'd still need an gateway application that acts as a exchange, which you probably have to initially set up. But after that anyone that owns the (initial) tokens could act as an exchange as well. The most simple exchange possible would be just to use one of the Ethereum api, like web3 to access the smart contract.
      If the initial owner of tokens is you, than it's up to your sales skills to decide what the price will be. After all, Bitcoin was started also initially with value 0. That probably depends on what value your gateway application will have.
  • gerbrandvdgerbrandvd Member Posts: 10
    Some addition: ether itself is also a currency or token on Ethereum. It's not meant to be an alternative currency but could act as one.
    There's a distributed exchange in the making: http://etherx.com/ Not involved in its making, but it starts to look promising.
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