Why Solana’s DEX Serum Will Crush It [Solana Series]

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Welcome to the New To Crypto podcast designed to guide you through the crypto landscape with pinpoint accuracy created for the new and intermediate crypto investor. Join your host Crypto Travels Michael as he takes you through the different facets of getting started and succeeding in your crypto journey. New to crypto podcast brings you new episodes daily Monday through Friday with surprise bonus episodes sometimes on the weekend. Let me ask you, are you new to crypto don’t know where to start? Are you more experienced but have questions? Then you’re in the right place. This podcast is designed for you, coming at you from the training center in the lifestyle design studio. Here’s your host Crypto Travels Michael.

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Welcome to today’s episode. Today I’m excited to announce to you that this podcast has been heard in 1000 cities around the world. So I truly thank you the listeners and it’s also been heard in 94 countries as well. So today’s a really awesome episode and I’m really excited. Since this podcast is growing. We’ve been heard literally across six continents. And I’m been working hard with my team and we’re preparing excellent episodes and content which will really help you in growing in your crypto journey. So without further to do, let’s jump into today’s episode: Why Solana’s Dex Serum will crush it. 

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So, what is serum? Well, Project serum is a decentralized exchange, also known as a Dex, built on the Solana. Blockchain from the same team that created the FTX Crypto Exchange. 

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Serum provides unprecedented speed and low transaction costs for DeFi, for decentralized finance. According to its website, Serum offers sub-second trading and settlement speeds, and the transaction cost per transaction is like 0.00001. So it’s a fraction of one US penny for transaction costs. Solana is a blockchain platform that aims to increase user scalability through faster transaction settlement times. And if you haven’t seen my episode about Solana, I definitely recommend after this one, that you listen to the one about Solana. So, by being deployed on Solana, Serum can fully benefit from the speed and cost-effectiveness of transactions settled on this blockchain. Serum is one of the first major projects built on Solana and is interoperable with other blockchains; Ethereum being one. 

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Unlike other Dexes, Serum’s trading is done through order books, like they do on a centralized exchange. In this sense, it is capable of handling between 50,000 up to 65,000 transactions per second, thanks to the also the speed of Solana. Currently, around 68 different tokens can be swapped on Serum Dex. I actually just counted them for you. And I’m sure there’ll be adding more as time goes on regularly. So Project Serum is a recent protocol, it’s still under development actually just rolled out not too long ago. So they’re going to continue to develop it and perfect it, and add even more functionality and features, if you check out the roadmap, so its operation will continue to evolve in the coming months and years. For now, however, it operates on three main pillars the Solana SPL token standard, the interoperability, and Serum’s native SRM token, Serum is a very ambitious project with one of the best development teams in crypto at the same time. It’s very innovative, and I believe it’s going to become one of the large Dexes and it is developed on Solana. 

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The benefits and technology of Serum are the following Serum provides a fully on chain order book allowing applications such as trading interfaces to plug into Serum’s composable ecosystem. Serum lives in the heart of the ecosystem providing services to its ecosystem applications, each with their own technology instead of users. Anyone can create a trading application that leverages Serum’s liquidity and its ecosystem benefits. One of Serum’s major utility is its ability to bring cross chain swaps to its exchange allowing any participant to trade tokens that exist on other platforms using cross chain exchange between Ethereum tokens ERC 20s, for example. The cross chain swaps mechanism happens once both parties send ether to a smart contract as collateral if the sender sends a token to the receiver in exchange for a token, both parties will receive their ETH collateral back the cryptocurrencies that appear in Serum such as yearn finance, USDC token and USDT are not the classic Ethereum ERC 20 tokens, but Solana SPL tokens. So the ones that are on the serum decks on their exchange are Solana SPL tokens, any token that is not SPL must be wrapped to use it in their protocol in a similar way of wrapped Bitcoin wrapped Ethereum etc. Wrapping is nothing more than giving the cryptocurrency to a custodian who meant an equal amount of tokens but on another blockchain, so, non-SPL tokens can be converted on the FTX exchange which offers wrapped versions of major coins such as Bitcoin, Ethereum, ChainLink and you can use your Metamask wallet, although both require the use of sollet.io. That’s S-o-l-l-e-t.io. 

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Serum uses smart contracts as built in economic incentives in order for users to exchange assets across different blockchains in a trustless manner. Both parties involved in the exchange are required to put up a certain amount as collateral. If one of the parties does not receive its funds. It can dispute the swap with the smart contract by sending a snapshot of the transaction request that is stored in the Solana blockchain if the dispute is valid, the sender wins the bet. If it is not the sender receives part of the receiver’s wager. As previously mentioned, Serum is a unique Dex because it works with order books, similar to centralized exchanges. However, Serum uses decentralized automated limit chain order books that allow users to submit order with addresses prices and sizes, giving them control over their trades. The most noteworthy feature is that it also has ETH/BTC order books thanks to inter operability, these letters are not centrally controlled, they’re fully programmatic and automatically match orders between third party users these are Serum’s main source of pricing and a fee is charged for each transaction that goes into it. 

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SRM purchase burn at the same time maintain SRM offers up to 50% discount on all fees. Serum is currently in phase three of its roadmap where they intend to improve interoperability by adding more bridges between the different chains they are also looking to integrate an AMM system and include more native SPL tokens. The ultimate goal of this third phase is to grow the volume and operations and user volume. This third phase should also see the implementation of DeFi products, such as decentralized lending and borrowing, yield farming and even integration of automated market making smart contracts mimicking the technology currently used by leading Dexes like Uniswap. 

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The Serum history and founder is… Serum story is linked to Sam Bankman-Fried. He’s basically one of the biggest names in crypto and he quite possibly might be the largest investor in crypto. So, Sam is an MIT graduate who worked trading ETFs at chain street capital and later founded Alameda Research, which is a cryptocurrency trading firm in 2019. Sam founded FTX a cryptocurrency derivatives exchange and has been very active in the SushiSwap community as well being considered by users as one of the leaders in that Dex as well. The idea for Serum came up during a brainstorming session that Sam had with the FTX development team there the idea of creating a Dex came up although they did not want to do it on the Ethereum network because of the limitations. So after analyzing several blockchains, they came to the conclusion that Solana would be the best option.

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 Sam and his team also wanted the decks to be independent of FTX. SRM is a Serum’s native token and it is an SPL token on the Solana blockchain, although it is also possible to find SRM as ERC 20 tokens on Ethereum blockchain. They are mostly used to steak on Serum, which allows to run on validation nodes. SRM tokens can be staked on a node each validation node must have at least 10 million SRMs or one mSRM which is a mega serum token that is equivalent to 1 million SRM tokens. The person who creates a node becomes a leader in others delegate the required SRM to their node to become validators. In this way a pool of SRM is created and distributed as a stake reward for each node validators assist in inter chain exchanges and receive a portion of the fees for any transactions and trigger orders when validating the transaction the node leader receives 15% of the total reward and the remaining 85% it’s divided proportionally. Project Serum organised two simultaneous initial exchange offerings for its SRM token in August of 2020, and these took place on FTX and Bitmex cryptocurrency exchanges with each exchange selling 3 million SRM tokens. Currently, there’s about 133 million SRM tokens in circulation by the way, and those tokens can be bought, sold or exchanged on major exchanges such as Binance, FTX, Gate.io, Uniswap, and some other ones. I hope today has been informative as to what Serum is. I believe that the Serum project is going to crush it. It has the great leadership behind it, they have endless liquidity and they have all the relationships in the in the entire crypto industry. So it’s definitely going to be a project that I’m going to be watching closely as time goes on. If you like today’s episode, definitely like and subscribe to the podcast. I love reading your five star written reviews. If you want to email me directly, you can email me at show at new to crypto.io Until tomorrow, make it a great day.

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