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.
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.
Switcheo was designed as they saw the growing popularity of NEO based projects and wanted to offer a way for investors to trade these tokens, without the need to rely on centralised exchanges given the growing difficulty to get a token listed on popular centralised exchange. Not to mention the security risks that come with storing funds a on centralised exchange. Switcheo combines security with ease of trade and their aim is not just to compete with other DEX’s but to compete with the likes of Binance and Kucoin.
Neon Exchange (NEX)
Neon Exchange (NEX) is yet to be launched but will be a “A High Performance Decentralised Trade and Payment Platform” running on the NEO blockchain. NEX begin their whitepaper by identifying a number of issues with both decentralised exchanges and centralised exchanges. Centralised exchanges come with large risks and decentralised exchanges are difficult to use, slow and restrictive.
Neon Exchange (NEX) is a new decentralized exchange that solves these problems, leveraging a high performance off-chain matching engine built with Elixir to handle massive order volume, allow cross-chain exchange, and support more complex trading APIs.
NEX will also 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.
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 SWH Tokens may be minted in total, and no additional tokens will be minted in future.
The allocations for SWH are as per follows:
20% (200,000,000 SWH Tokens) will be allocated to the Public Sale;
48.3% (483,000,000 SWH Tokens) have been allocated to Strategic Partners;
25% (250,000,000 SWH 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 SWH 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.
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 is why there is far less NEX tokens, the staking option will offer an incentive to investors, to hold the tokens which will in turn decrease supply and potentially increase the value of the tokens through scarcity.
Switcheo v NEX: Roadmap
- Q4 2017 – Switcheo MVP Demo
- Q1 2018 – Launch of Switcheo DEX for NEO, GAS & NEP-5 Q2 2018 – Launch of QRC20 trading
- Q3 2018 – Launch of ERC20 trading
- Q4 2018 – Cross-swap feature using SWH and Wanchain
- 2019 – Launch of trading for top 5 chains
- Launch of web extension for dApp integration with NEO blockchain and NEX exchange
- Registration, lottery, and KYC for NEX token sale
- Release of an open source framework for conducting such sales, including smart contracts,wallet and extension integration, KYC, and backend website
- Open source framework and template for interaction with NEX banking partner APIs
- Announcement of partnerships
- Participation for lottery winners in the NEX token sale
- Matching engine launch on NEO TestNet, along with v1 of exchange APIs for testing with our liquidity creation partners (e.g., trading bots)
- Trading interface launch on NEO TestNet: usability research and information gathering from alpha testers
- NEX web extension support for ETH and ERC20 tokens
- Buy and sell NEO, GAS, and RPX through banking partners
- Release of v1 of web extension dApp APIs, for integration on client websites and smart contracts on ETH and NEO (e.g., APIs that allow websites to interact with smart contracts, or request payments in NEO or ETH or constituent tokens from a user)
- Beginning of trading operations: Matching engine and trading user interface launched on MainNet with support for NEO, ETH, NEP5, and ERC20 tokens
- Cross-chain token conversion support in NEX extension wallet
- Launch of staking contract on NEO for holders of NEX to receive exchange revenue
- Once required licenses are granted, NEX and other security token trading starts on NEX • Advanced trading features
- Cross-chain support for trading BTC, LTC, and RPX on NEX
Switcheo V NEX: Roadmap
As you can see the NEX roadmap is a lot more detailed but this is simply because they have gone into a bit more detail within each development throughout the varying quarters, again minor details like this are what creates the hype that NEX has that Switcheo may be currently lacking. 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 wo well for Binance is sure to benefit SWH token holders, once the exchange starts to gain a large amount of trading volume.
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 – Website
NEX – Whitepapaer
Switcheo – Website
Switcheo – Whitepaper