Serum (SRM) Research

Serum (SRM) Research Details

Serum (SRM) Serum

INTRODUCTION

Serum is a type of decentralised exchange (DEX) built on the Solana blockchain that allows traders to buy, sell, and trade cryptocurrencies. Serum wants to make decentralised exchanges better in the DEX and in the larger ecosystem by bringing all the benefits of a centralised exchange to the DeFi space.

The fact that the DEX platform is hosted on the Solana blockchain makes it very fast. On the other hand, the Solana blockchain has an edge over its competitors because it can handle more users and settle transactions faster.

Also, as one of the first big DEX projects on its host blockchain, Serum is building a future-proof Defi ecosystem with the help of its DEX platform, which is also the main pillar. It can be used with all Ethereum-based cryptocurrencies.


HISTORY AND FOUNDER

Sam Bankman-Fried, a well-known businessman in the blockchain industry, started Serum. One of the wealthiest people in blockchain, he also started FTX Exchange and Alameda Research, a cryptocurrency liquidity pool provider/investor.

The Serum project features a team of 11 prominent blockchain strategists and developers serving as business advisers. Bankman-Fried is one of the advisors, and the team also includes other well-known people in the blockchain and cryptocurrency worlds. Among them are Robert Leshner, who created the Compound (COMP) protocol, and Long Vuong, who started and runs TomoChain (TOMO).

Serum has raised more than $20 million in venture capital (VC) funding over six rounds. The financing was provided by ten individuals and institutions. The project's main investor is GVB Capital, an investment firm that focuses on cryptocurrency and blockchain projects.


REASON TO BUILD THE PROJECT

In July 2020, Serum's whitepaper was released. According to this whitepaper, the project's goal is to fix several problems with existing DEXs, such as the speed and cost of decentralized exchanges, lack of order books in AMMs, and insufficient cross-chain support. Serum chose Solana as its Layer-1 protocol because it makes transactions faster and cheaper than Ethereum. Solana's ability to process data more quickly made it possible for Serum to have a fully on-chain and programmatic matching engine.

Most of the mentioned problems are solved by Serum, which does so with the help of the Solana blockchain. Each transaction is done quickly and at a low cost. Since it can handle 65,000 transactions per second, it can use the orderbook system that most centralised exchanges use. When it comes to cross-chain swaps, Serum uses smart contracts with built-in economic incentives to enable trustless asset exchanges across different blockchains.


BASE OF PROJECT

On-Chain Central Order Books- In traditional exchanges, an order book is a list of buy and sell orders that is organised by price levels and managed by a central entity. Serum's decentralised exchange attempts to automate this process on a chain by connecting sellers and buyers depending on their orders.


Cross-Chain Functionality- Serum's ability to allow cross-chain swaps on its exchange is one of its most useful features. This means that any participant can trade tokens that exist on other platforms.


Using the cross-chain exchange of Ethereum tokens (ERC-20) as an instance, the cross-chain swaps mechanism occurs when both sides send ETH as collateral to a smart contract. If the sender sends their token to the receiver in exchange for their token, then both parties will get their ETH collateral back.


USE CASE

SRM tokens are used in many ways by the Serum ecosystem, all of which help SRM holders and the platform itself. SRM token can be used in the following ways:

  • 100% of Serum trading fees are used to purchase SRM tokens from the market and burn them from SUPPLY

  • SRM holders get up to 50% off Serum trading fees. MSRM holders (1,000,000+ SRM) get up to 60% off.

  • SRM tokens can be used to stake nodes and receive staking rewards. FTX Exchange is the simplest place to stake SRM tokens.

  • Serum governance is available to SRM stakers, so anyone who owns the token can vote on ecosystem issues.

  • Holding SRM tokens enables you to access airdrops on Serum and throughout the Solana ecosystem.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

28/10/2021

Project Serum allocates $100M to liquidity mining

+31% Increase

 

18/05/2021

China closes financial, payment, and cryptocurrency trading institutions

-48% Decrease

24/04/2021

Serum (SRM) hits a new all-time high as Solana adoption gains attraction

+127% Increase


CONCLUSION

Serum is a decentralised cryptocurrency exchange that runs on the Solana blockchain and lets people buy different cryptocurrency tokens. These don't have to run on Solana, since Serum also works with Ethereum and Polkadot, among others.

Serum uses a decentralised order book instead of an automated market maker (AMM). Usually, order books are only utilized by central exchanges. The team behind Serum has discovered a way to still use an order book on a decentralised network.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.