Mainstream adoption of cryptocurrency has been accelerating rapidly over the past few years. It has been a bumpy ride so far, though, with many characterizing this pioneering, disruptive technology as “the wild west.” Issues like hacking, fraud, theft, country-wide bans, market manipulation, downtime, and so much more have each beset the cryptocurrency marketplace time and again.
Millions of dollars’ worth of crypto have already been lost during the first half of 2019 as a result of hacks, thefts and other losses that have taken place at centralized exchanges. Countries like China, Jordan and India have responded by imposing strict regulations, restrictions and bans against cryptocurrency.
As a blockchain solutions provider specializing in security and privacy products, Luxcore has been working towards addressing the problems created by centralizing cryptocurrency marketplaces. Our innovative approach to cryptocurrency exchange is to build a truly trustless peer-to-peer marketplace for the people. Our goal is to build a feeless, decentralized, secure exchange that puts people first and is wholly absent of centralized control and corporate greed.
LuxGate enables direct peer-to-peer, wallet-to-wallet trades without the intervention of any trusted or centralized third-party. Not only does LuxGate decentralize trade agreements, but the architecture itself is distributed through at least as many nodes as there are traders connected to the software. LuxGate has no centralized points of control or failure, built upon the resilience and immutability of blockchain technology.
LuxGate will have zero downtime, guaranteed. Its truly decentralized design is immune to DDoS attacks and offers limitless network capacity. When centralized exchanges sag under network load amid heightened demand, LuxGate is your insurance policy against missing out when markets move fast.
Many exchanges now use “decentralized” or “DEX” as a buzzword with no understanding of or appreciation for what it really means. Most so-called DEXs are would be better characterized as a hybrid exchange - a centrally-controlled platform operating on the blockchain. But of course, anything that relies on central control or is exposed to single points of failure cannot legitimately claim to be decentralized.
• Secure trading
• No Accounts
• No Limits
• No Fees
• Zero downtime
• Trading pair freedom
• Decentralized Order Books
• Decentralized Order Matching
The LuxGate Protocol is a 2nd layer blockchain interoperability technology that enables communication, interaction, and exchange between different blockchains, providing functionality to swap coins across blockchains without any 3rd party interference.
In order for LuxGate to realize its goal of becoming a truly decentralized exchange, there needs to be a way for everyone to be able to see all the swap orders in the network - bids and asks, trading price and matching orders. LuxGate's global order book is responsible for this. There is no website, individual or entity hosting the order books. With LuxGate you can enjoy a trading environment where orders are filled fairly and transparently.
Common centralized exchanges also have a trade history. Decentralizing this functionality will be achieved by using LuxGate Archive, which grows over time with a tree-like data structure. Once a trade order is fulfilled, that data is written onto the LuxGate Archive.
LuxGate Archive provides the following data:
• lowest bid
• average bid
• average ask
• highest ask
• number of orders completed
With all this information we are able to provide a complete set of trading tools that will be comparable to any centralized exchange. LuxGate Archive will continue to undergo active development to improve the breadth of features it offers and to eventually transition it to the blockchain using Luxcoin smart contracts for better performance.
There have been a multitude of security failures over the years at centralized crypto exchanges. We should have learned our lesson after Mt. Gox or Mintpal or Cryptsy - or any one of the other dozens of security collapses that have occurred. But as QuadrigaCX, Cryptopia and others have proven just this year alone, security at centralized exchanges remains suspect at best.
Thus, security and access are two of the most significant barriers to entry for cryptocurrency generally, and both are major concerns for traders and those who might like to get into crypto trading. If the crypto ecosystem is to achieve its original goal of decentralization and 100% trustlessness, then the problems with security and access must be solved.
For a DEX to be truly trustless, there are four individual components that each must be completely decentralized:
4 REQUIREMENTS FOR A TRUSTLESS DEX:
• No deposits: Your funds always remain in your own wallet, and thus under your control throughout the whole trade process.
• Order broadcasting: Orders are broadcast directly from each trader and the order book is compiled locally instead of relying on a central order book service. This prevents “front-running” (a practice similar to insider trading that runs rampant on centralized exchanges), and it also eliminates the possibility for the order book to be altered.
• Order matching: Orders are matched directly between traders. When one accepts another’s order, the exchange process automatically begins, and this is broadcast over the inter-chain network.
• Settlement: There is no involvement of a third part or intermediary (unlike a centralized exchange) when a trade takes place. At the moment of the trade, an atomic swap automatically takes place (meaning that either the exchange of both currencies takes place, or nothing takes place), ensuring your digital assets are in your possession at all times and always under your control. This process exchanges the digital assets directly rather than relying on derivatives like proxy tokens or coloured coins.
These 4 components must all be present to undertake decentralized trading in a 100% trustless manner from a wallet you control. Any true DEX must necessarily offer this amount of control and security over your cryptocurrency. If they don’t, then they’re not a DEX.
LuxGate is a non-custodial trading platform. That means your coins remain your coins throughout the whole trading process At no time are your coins entrusted to a central third-party. Both parties in a trade always retain full control over their private keys.
Full control over private keys enables a purely trustless and permissionless trading experience. Owing to the peer-to-peer, non-custodial nature of LuxGate trades, users do not need to create an account. No account creation means LuxGate does not collect any of your personal information, thus eliminating the threat of data loss and identity theft that is omnipresent at centralized exchanges.
Since every node connected to LuxGate participates in maintaining the network, LuxGate has no jurisdiction. In addition to no sign-up or email verification requirements, LuxGate will also never require any KYC/AML of you, guaranteed. Users are permitted to participate in LuxGate from anywhere in the world, liberated from the threat of geoblocking, protected by as much privacy as is offered by the individual blockchain(s) of the coins you trade on LuxGate.
Project listing information
As we stated at the beginning of this article we want to build an exchange for the people, but also an exchange for all the various blockchain communities that comprise crypto. We do not intend to charge any listing fees for a project to become a part of LuxGate. Instead, the process will be as follows:
1. A representative of the project must fill in the application form to get onto the waiting list
2. The Luxcore team will do some due diligence to verify the legitimacy of the application.
3. Project teams will be required to pay a small fee in LUXCoin for the initial setup and testing of the coin’s blockchain in the LuxGate Protocol. We will eventually implement an open-source procedure to allow teams to do that work themselves and submit it to the team for review, in which case no onboarding fee will be required.
4. Since we are not taking any listing fees, we ask that projects on LuxGate hold an amount of LUXCoin equal or greater than $5000 USD*. In so doing, projects can demonstrate their support for our project and invest in its success at the same time. The funds always stay in the hands of project itself and we will never ask for you to transfer them to us. Projects are free to sell their LUXCoin at any time, whenever they choose to discontinue their listing on LuxGate. Maintaining a LuxGate listing is contingent upon maintaining a minimum balance of $5000 USD* in LUXCoin.
Following the completion of these four steps, projects will be responsible to advise us of any updates or fork that they encounter. Updates will be made directly by the projects themselves and submitted to us via our GitHub Repository. We will make sure to make the update procedure as easy as possible for everyone using LuxGate.
*holding amount is subject to change until final release but our goal is to keep it accessible for everyone.