This year has seen the rise of NEP5 tokens, with a number of exciting projects launching on the NEO blockchain. It is exciting times for NEO and NEP5 investors given the hype behind a number of these projects. Two of the most exciting projects are certainly the two Decentralised exchanges which will run on the NEO blockchain: Switcheo and Neon Exchange (NEX). This article will be a quick comparison of Switcheo v NEX to see how the two differ from each other.
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First a quick review of each project before we look at Switcheo v NEX
Switcheo (SWH) was the first Decentralised exchange to run on the NEO blockchain after their brief ICO on 17th March 2018. They raised their max cap of $8,700,000 within 24 hours. There was not too much hype around this project given that they have a fairly small following on social media in comparison to similar projects.
Switcheo did however have a working product which was a big selling point and most likely what helped them conclude their token sale so quickly. The testnet was available to use throughout the ICO whilst the mainnet was being finalised. The mainnet is now available and users can trade most NEP5 tokens with the trading pairs NEO, GAS and SWH tokens.
Throughout the year Switcheo has introduced a number of exciting updates, including a partnership with O3 Labs which involves integration into the popular NEP5 mobile and desktop wallet O3.
“We had a chance to meet with the Switcheo Team while they were in Tokyo to continue our conversation about the integration. We are excited about what the Switcheo Team has built and is building. This integration will enable our users to log in to Switcheo and trade directly from their mobile wallet, fullfilling many support requests we have received from our users. We are glad to partner with a like-minded company like Switcheo. We always strive to provide our users the best user experience and our partnership and collaboration with Switcheo is part of that.
The Callisto update is likely to be another hugely positive move for Switcheo, as this will involve adding support for both the Ethereum and the Qtum blockchain. Allowing users to trade ERC20 and QRC20 tokens on the decentralised exchange.
The Callisto update was due to be launched by the end of Q3 2018, however the team have decided to move this back slightly for a few reasons. Including, understanding the Qtum blockchain more. As this is a slightly less mature blockchain they would like o have a more in-depth knowledge before they enable on-chain trading. They are also planning to focus on marketing and partnerships in order to build a larger customer base. This will meant the addition of ERC20 and QRC20 trading will have a greater impact.
To be transparent, I would like to inform our community ahead of time that we won’t be going live with Callisto in September. While there is still some time left in this quarter, we currently foresee that the much awaited update will be pushed back.
As well as announcing that the highly anticipated Callisto update will be delayed. Switcheo also made a pretty big announcement that they will be launching their own blockchain, known as a “Dex Chain” as this is the only was they believe they can offer a cross chain decentralised exchange.
At this point, the engineering team has concluded that to provide a truly trustless cross-chain exchange, we will have to move forward with building our own specialized blockchain for this purpose. This “DEX chain” will also make use of public validators which have to stake native tokens.
Neon Exchange (NEX)
Neon Exchange, also known as NEX have recently concluded their token sale. The token sale itself was pushed back repeatedly over the course of the last few months, although, with good reason.
The team at NEX announced that the “NEX security token” had finally been approved after a year-long effort involving a number of law firms and dozens of lawyers.
While this approval has allowed us to finally begin raising money from public investors, it has much broader implications for our company and the cryptocurrency markets as a whole. The NEX security token allows us to deliver strong token economics for investors in our exchange. It also sets precedent for many other projects that are seeking to issue tokenized securities in the European markets, and lays the groundwork for our future plans to legally interact with governments and regulators.
This means a number of different things for NEX, aside from them being the first ever blockchain based based security token in Europe, they have potentially paved the way after setting a precedent for future blockchain projects.
Issuing a security token brings investors in NEX many benefits, such as protection against market manipulation, fraud, and insider trading. Perhaps most importantly, it allows us to pay our investors dividends through fees taken by the exchange, a form of profit sharing.
NEX will be the first ever decentralised exchange that will allow its “clients to enter the exchange with fiat currencies such as USD, powered by a global network of licensed third parties.”
NEX will consist of three main features; an off chain matching engine where trades can be matched similar to a centralised exchange but with security of a decentralised exchange, a smart contract where trades are executed and a payment service. NEX is yet to have their ICO but it is due in April sometime. The users for their lottery have been announced and those will be the first participants of the NEX token sale. NEX do have a chrome web extension which is already live meaning users can access their NEO wallets and this will link up directly with the NEX trading platform when it is live.
New have also announced a partnership with nOS, whom are developing the open internet of the future. nOS will integrate NEX as their only payment gateway.
The nOS & NEX partnership will bring several new features for both platforms. nOS will natively integrate features of NEX, and vice-versa, so as to make the Smart Economy as accessible and easy-to-use as possible, for everyone.
At a recent conference Da HongFei, the co-founder of NEO stated that NEX was the most famous decentralised exchange being developed on the NEO blockchain and that this could have a major impact on NEO as a whole.
I think it’s similar, yeah. We have ICOs, NEP-5 tokens, equivalent to ERC-20, and we also have decentralized exchange, the most famous one is called NEX, they’re doing pretty good, and also we are encouraging developers to do gaming, and STO, the secure token offering, I do think that decentralized exchange, gaming, and STO probably will be the next killer app.
Switcheo v NEX
In terms of the two exchanges, both will be decentralised exchanges and both will have a native token and will allow for cross chain swaps between the various blockchain based projects.
Switcheo v NEX: Tokens
1,000,000,000 SWTH Tokens may be minted in total, and no additional tokens will be minted in future.
The allocations for SWTH are as per follows:
20% (200,000,000 SWTH Tokens) will be allocated to the Public Sale;
48.3% (483,000,000 SWTH Tokens) have been allocated to Strategic Partners;
25% (250,000,000 SWTH Tokens) will be reserved for the Switcheo Team to further incentivize development of the Switcheo DEX, and the tokens will be vest monthly on a 2 year schedule with a 3 month cliff; and
6.7% (67,000,000 SWTH Tokens) will be reserved for Marketing Campaigns & Official Partnerships.
SWH Tokens can be used to subsidise trading fees on the Switcheo DEX by 50%, SWH Tokens will be burnt when they are used to pay trading fees.
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50,000,000 NEX tokens will be issued, and will entitle holders to a share of the fees generated by the exchange and payment service
NEX holders can claim their profits through a staking process, where claims on the staked NEX operate similar to GAS claim calculations on the NEO network. In this way, token holders who stake NEX benefit directly from the success of the exchange services: as more fees are generated, holders will receive larger rewards. NEX tokens will be regulated as registered European securities with plans for expansion to other jurisdictions
Switcheo v NEX: Tokens
The two exchanges have taken a very different approaches with their native tokens. Switcheo (SWH) will be used to pay fees hence why there is a much greater number of them, however, SWH tokens will be burnt when used to pay fees. This will reduce the number of tokens increasing the value over time as the exchange makes more profits. The NEX token on the other hand will allow users to stake their tokens and profit directly from the success of the exchange. This as been enabled by the fact NEX is now a registered security token. They are able to provide dividends to users which is the reason why there is far less NEX tokens.
Switcheo v NEX: Roadmap
Mid July – V2 Update:
- New Trading APIs
- Instant Trade Confirmation
- Mobile UI
Q3 2018- Callisto Update
- Qtum Trading
- Ethereum Trading
- Fiat Gateway with 2 partners (credit card & bank deposit)
- Cross Swaps
- Integration of next 3 blockchains
- V3 API and order matching engine (microsecond latency)
- Integration with a specialized blockchain that can better support cross-chain trading
Cross-chain token support
MainNet trading release
Staking contract release
Launch of staking contract on NEO for holders of NEX to receive exchange revenue
Launch of cross-chain cryptocurrency index fund, supported by the exchange and extension
Switcheo V NEX: Roadmap
Switcheo updated their roadmap throughout the year and NEX’s roadmap has moved slightly backwards due to their ongoing legal battle. Both do seem to have very clear intentions and will both play a major role in the future of decentralised exchanges.
Both projects will be looking support for ERC20 tokens this year and will then focus on cross chain swaps between the different tokens.
Switcheo will then have more focus on adding all of the different tokens across the various chains including QRC-20 tokens, ERC-20 and Wanchain. NEX will focus more of their attention on the user interface side of things through their web extension. They will also look to add the payment service, which will allow users to buy and sell NEO and GAS with registered banking partners.
Overall both look like very exciting projects, Switcheo is certainly setting their sights to the ‘moon’ when it comes to being a globally used decentralised exchange. The fact they are looking to add support for as many tokens across as many different chains is certainly a huge positive for this project and the token burning feature which has worked well for Binance is sure to benefit SWTH token holders, once the exchange starts to gain a large amount of trading volume. Since Switcheo have announced they will be launching their own blockchain/Dex Chain, they may have much more of a presence as an actual decentralised exchange. The main stumbling block for Switcheo may be their user base, they will need to focus significant efforts on marketing which they have signalled their intentions to do so.
NEX is going to have a clear focus on being user friendly and opening up the world of blockchain and cryptocurrencies to the masses. The web browser plugin looks easy to use and when they become the first decentralised exchange to offer the ability to be able to convert tokens into fiat currency this will be huge news. It will open up a whole new avenue to cryptocurrency investors and is sure to attract new investors. They already have a large following on social media and this project has huge potential ahead of it. NEX will potentially focus on payments and providing liquidity, and once Switcheo launch their own blockchain NEX will likely become the main trading platform and liquidity platform for the entire NEO ecosystem. NEX have a very large social media following so gathering a user base should be simple.
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NEX – Website
NEX – Whitepapaer
Switcheo – Website
Switcheo – Whitepaper