A Beginner’s Guide To AirSwap, The Crypto Exchange Of The Future

AirSwap

Have you wondered why it is raining decentralized exchanges (DEXs)?

Well, it is because they are the savior of the crypto economy as well as the future if cryptos have to thrive. I have elaborated on the same in my previous write-up: Why Decentralized Exchanges Are The Future Of Cryptocurrencies.

Decentralized exchanges are going to become much more relevant with time, especially if government regulations becoming more stringent towards cryptos around the world.

Hence, it is apt to discuss another upcoming decentralized exchange – AirSwap. In this fundamental analysis of AirSwap (AST), we will discuss:

  • What Is AirSwap?
  • Key Components Of AirSwap
  • AirSwap Token Utility
  • AirSwap Team
  • AST Token Supply & AST Market Cap
  • Where To Buy AirSwap Token (aka AST)
  • AirSwap Token (aka AST) Wallets
  • AirSwap’s Roadmap & Conclusion
  • Official AirSwap Resources

What Is AirSwap?

AirSwap is a decentralized exchange for ERC20 tokens and it achieves that by implementing Swap protocol, a peer-to-peer protocol for exchanging Ethereum tokens.

Unlike centralized exchanges, AirSwap doesn’t use order books that inherently has many drawbacks on the blockchain such as latency, scalability and front-running issues among others.

AirSwap mixes best of both the worlds, i.e. off-chain and on-chain, to help intended parties negotiate for a trade in a fair, secure and private way. AirSwap uses a strong alternative in peer-to-peer token trading – off-chain negotiation and on-chain settlement through Swap protocol.

But have you ever wondered why just peer-to-peer?

Well, the answer is in these three key points:

  • Peer-to-peer trading scales
  • Peer-to-peer trading is private
  • Peer-to-peer trading is fair

But it is not as simple as it looks on the outside, as there are many elements that work in tandem to achieve a seamless experience for the users and this is what we will discuss in the next part.

Key Components Of AirSwap

AirSwap is based on these 4 key components (Source: AirSwap Whitepaper):

#1 Peer Protocol

You can think of peer protocol as a messaging platform where counterparties can talk and negotiate in a quick, fair, and private manner. This happens off-chain.

Peer-Protocol

  1. Taker calls on the Maker
  2. Maker replies with an order
  3. Taker calls on the contract to fill the order

Note: A ‘Maker’ is a party that provides an order, and a ‘Taker’ is a party that fulfills it.

#2 Indexer Protocol

An indexer is also an off-chain service that first aggregates ‘intent to trade’ from both the Maker and Taker sides and then matches peers based on it. Once the Taker has found a Maker with whom they would like to trade, they proceed to negotiate using the Peer Protocol as explained in the first point. Once an agreement is reached between the Maker and Taker, the order is filled on the smart contract.

See the interaction of Maker, Taker, and Indexer is illustrated in the following diagram.

Indexer-Protocol-AirSwap

  1. Maker calls on the Indexer
  2. Taker calls on the Indexer
  3. Indexer calls on the Taker when found a trade
  4. Taker calls on the Maker
  5. Maker replies with an order
  6. Taker calls on the contract to fill the order

#3 Oracle Protocol

An Oracle is an off-chain service that provides pricing information to Makers and Takers. When pricing an order prior to delivering it to a Taker, a Maker may ask the Oracle for a fair price suggestion. Likewise, having received an order, a Taker may ask the Oracle to check the price on the order to verify that it’s fair.

The Oracle provides this pricing information to help both the Maker and the Taker make more educated pricing decisions and also for a smooth process of trade negotiation.

Maker calling oracle before providing order

  1. Taker calls on the Maker
  2. Maker calls on the Oracle
  3. Oracle returns a price to the Maker
  4. After analyzing price information, Maker replies with an order
  5. Taker calls on the contract to fill the order

A very similar interaction happens between Taker and Oracle when the Taker receives an order.

Oracle protocol
Maker calling oracle before providing order
  1. Taker calls on the Maker
  2. Maker replies with an order
  3. Taker calls on the Oracle
  4. Oracle returns a price to the Taker
  5. After analyzing price information, Taker calls on the contract to fill the order

#4 Ethereum Smart Contract

Ethereum smart contacts are conditional contracts written in solidity to fill or cancel orders in AirSwap ecosystem. Read more here: What Are Smart Contracts in Relation To Ethereum?

AirSwap Token Utility

AST is intended to provide two utilities:

  • First, holding AST will give traders the ability to add their “intent to trade” to the Index. This effectively signals to peers their intent to buy or sell specific Ethereum-based tokens. These holdings of AST are locked in a certain amount when you trade using AirSwap platform and you get the rights to add ‘X’ number of ‘intend to trade’ into the system. These rights expire in a few days and you get your locked AST tokens back. Currently, lock amount is 100 AST and expiry is 7 days.
  • Second, AST gives traders voting power to manage the roles of Oracles within the platform.

Note: This AST token is an ERC20 token and is not a security token or a dividend paying token in any way.

AirSwap Team

The AirSwap team is quite promising and is backed by ConsenSys.

One of the co-founders is a veteran algo-trader while the other is product designer. It also boasts of an impressive advisory board. (See full team here)

AST Token Supply & AST Market Cap

Out of total fixed supply of 500 million AST tokens, 150 million ASTs were sold in October last year for 119,511.44 ETH.

150 million is actually 30% of the total supply. Of the remaining 70%:

  • 10% is for New Partners
  • 10% is for Advisors – for the most part, 4-year vesting
  • 10% is for Founders – 4-year vesting
  • 40% is locked in a multisig for future use

According to CoinMarketCap, the total circulating supply is 150,000,000 AST, and the current price of each unit is $0.08 that values it at approximately $12 million (at the time of writing this article).

Where To Buy AirSwap Token (aka AST)?

Here are some of the exchanges where you can buy AST tokens:

  • Binance: Supported pairs are AST/BTC, AST/ETH
  • Huobi: Supported pairs are AST/BTC
  • Liqui: Supported pairs are AST/BTC, AST/ETH, AST/USDT
  • OKEx: Supported pairs are AST/BTC, AST/ETH, AST/USDT
  • Gatecoin: Supported pairs are AST/BTC, AST/ETH

Note: Buying AST in fiat currencies such as USD, EUR, or GBP is not possible now.

AirSwap Token (aka AST) Wallets

AST is an ERC20 token so you have plenty of options for storing your AST tokens safely. Some of these options have been listed below and will help you keep your AST safe.

AirSwap’s Roadmap & Conclusion

If you see at a glance, AirSwap is positioned in a much stronger position from technical/market maker point of view when you compare it with other exchanges. Here is a quick AirSwap vs others:

AirSwap-vs-Others

AirSwaps-RoadMap

On the other hand, for those unaware, AirSwap’s Token Trader is live and running since Feb 2018. Here is the AirSwap’s Token Trader. Currently, you can access AirSwap’s Token Trader DEX via such as MetaMask and the Ledger Nano S.

This allows users to trade AST for ETH and vice-versa, without any trusted third party, without any fees, and without giving up any of their personal information. But more token pairs will be added soon as per the roadmap of 2018 under their partner network programme.

Also, in this mobile-driven economy, a mobile app for AirSwap DEX is in development and will soon reach beta.

Lastly, I see AirSwap going places, for they can provide tools and services to fuel this tokenization of the world by blockchain based tokens because their team has what it takes to reach those levels.

And with several iterations and ease of use, AirSwap can be a tough competitor for other exchanges in ERC20 exchange niche because it is quick and peer to peer, which suits humans needs quite well.

If there is any other token/coin that you want me to cover, please let me know in the comment section below and I will have a look at it.

Official AirSwap Resources

Some official links that will help you stay updated on AirSwap project:

5 thoughts on “A Beginner’s Guide To AirSwap, The Crypto Exchange Of The Future”

  1. Thank you for the article Sudhir. Yes I would agree, DEX’s are definitely the way of the future.

    But if this Airswap exchange only allows a small fraction of swapping – IE, of Ethereum based ERC20 tokens and not the rest of the coin universe – why not use something like Barterdex instead which allows for swaps between ANY tokens whether Bitcoin based or Ethereum based!

    Barterdex is P2P and the support staff on Slack is really the best Ive ever dealt with. Given the quality of the development team and community, I think the KomodoPlatform project is a leader now and will continue to be a leader in the future. Whats your take on Barterdex?

    1. BarterDEX is certainly a good option. I am yet to try it and hope so it has become more matured and easy to use then it was 5 months back. Are you using it?

  2. I have used Barterdex. The P2P functionality of atomic swaps is amazing as is the support community in Slack.

    They have added many coins and also offer swaps between Bitocoin based tokens with ERC20 tokens.

    Swapping has a relatively short learning curve with anonymity of course being the best feature. Swapping one token for another is quick but being in its infancy the liquidity isnt always there like a centralized exchance. Once enough people get on the platform there will be much more liquidity and i believe the platform will be a leader.

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