In an exclusive interview, CryptoSlate spoke with Will Harborne, the co-founder and CEO of DeversiFi. DeversiFi is a leading decentralized cryptocurrency exchange (DEX) that was formerly known as Ethfinex.
Although decentralized exchanges are still in their early stages, the five years since the first iterations like EtherDelta have seen them evolve dramatically. They now compete with centralized exchanges in terms of liquidity and speed, while offering far superior solutions for usability, security, and user privacy.
Harborne, a former project lead at the digital asset exchange Bitfinex and a blockchain consultant at IBM, discussed the key advantages of using a non-custodial exchange like DeversiFi for trading cryptocurrencies over more traditional centralized platforms. He also shared several user stories from traders who are benefiting from the DeversiFi experience.
What are the primary advantages of using DeversiFi to trade crypto assets compared to other major exchanges?
Will Harborne (WH): We’re proud to offer a blend of competitive advantages that makes DeversiFi an attractive platform for traders at all levels.
First, our unique architecture enables traders to access deep liquidity pools from both centralized and decentralized exchanges directly from the security of their own self-custody wallets. This preserves the core tenets of DeFi—user control and asset safety—while also taking significant steps toward solving the adoption barriers that have hampered traditional DEXs.
In the past, a trader had to choose between sacrificing security and control for speed and liquidity, or vice versa. With DeversiFi, they no longer have to make that compromise. In line with this, DeversiFi is incorporating features that rival those of existing exchanges, including decentralized lending and borrowing, futures options, as well as Over-the-Counter (OTC) functionality for large, institutional-sized trades.
Secondly, we have worked hard to build a decentralized exchange that not only competes with large exchanges on speed and liquidity but also introduces innovative features that bring decentralized finance (DeFi) and blockchain’s key innovations into practical, everyday use.
DeversiFi’s native utility token is NEC, which entitles holders to up to a 20% discount on DeversiFi trading fees. Perhaps more excitingly, it gives token holders and the wider community of developers a platform to shape the future of DeversiFi through the NecDAO; which, as of 2019, is set to become one of the world’s largest decentralized autonomous organizations (DAO).
This provides a distinct advantage for DeversiFi over the majority of existing exchanges, as it tangibly empowers traders to develop and vote on aspects of their platform. Instead of relying on a small group of executives, the community can guide the exchange’s evolution.
What are the main differences between building on Ethereum in 2015 versus today?
WH: The developer tools we rely on today simply did not exist back in 2015/16. Building applications on Ethereum then involved running a local node with a testnet. Tools that simplify development today—like Remix, Truffle, Infura, and Etherscan—were non-existent or very primitive. Wallets were also incredibly difficult to use. I’d be lying if I said everything is solved now, but compared to back then, we’ve come a very long way.
We try to support all the modern wallets and projects that are building infrastructure for developers and applications. It's a pretty daunting feeling when your entire business is reliant on this infrastructure, not to mention the Ethereum blockchain itself.
What has the feedback from customers been like so far? Do you have any specific examples or stories?
One story is from Albert, a developer based in Malta who uses DeversiFi to manage his long-term positions. He was impressed with the UI, the onboarding process, the variety of supported wallets, and the focus on self-custody security. On why he trades on DeversiFi, Albert said:
“I got started on DeversiFi because I liked the idea of a decentralized exchange with high liquidity that doesn’t clog the blockchain with a new transaction (and fees) for every single trade. I’ve continued using it because it fits my trading habits: the deep liquidity lets me execute my trades quickly at the market price, which is crucial for digital assets that have rapid and volatile price movements.”
Another example is Alex, a part-time trader. On the ease of using DeversiFi, Alex said:
“I have different ETH accounts for various decentralized applications and projects, so if I need to consolidate token balances across those wallets, it’s actually easier and faster to just open DeversiFi and swap tokens directly than it is to deposit, trade, and wait for a withdrawal from a centralized exchange.”
What role does the NEC token play in the DeversiFi ecosystem?
WH: The first version of the NEC token was originally launched back in 2017 as the exchange token for Ethfinex. Its purpose was to incentivize liquidity providers while offering a voting mechanism that let traders decide which new tokens they wanted to see listed, through the Kleros-enhanced Ethfinex Token Vote, which saw 15 successful rounds of voting.
Version two of the NEC token came alongside our evolution into a fully-fledged DEX with the shutdown of Ethfinex and the launch of DeversiFi. NEC2.0 (the current version of NEC with future changes decided through the NecDAO) now has three main innovations:
One of the most important features is, without a doubt, the NecDAO. In preparation for the NEC token roadmap transition, we allocated 50% of all Ethfinex trading fees to NEC holders in a token airdrop. All remaining fees from that period have, as a result of Ethfinex’s closure, been migrated to the NecDAO and placed under the control of NEC holders. As of today, there is approximately 17,500 ETH being sent to the NecDAO, which places the future of NEC directly in the hands of its holders and the DeversiFi community. This will be one of the world's largest DAOs as of 2019.
What changes or modifications have you made to the 0x protocol upon which DeversiFi was built?
WH: The smart contracts powering the DeversiFi exchange are built on the foundational 0x protocol and offer several benefits to the trader.
However, to bring competitive liquidity to the decentralized space, we had to create our own wrapper contracts. This allows orders created on DeversiFi to be matched against orders from a large, existing off-chain exchange.
One of the major changes is that to interact with our wrapper contracts, an order must go through the DeversiFi API. This API simplifies how the order is processed. Compared to interacting directly with a smart contract, the DeversiFi API makes it incredibly straightforward to create and submit orders.
The quality of the DeversiFi API gives anyone the power to build their own custom applications on top of it. This means any developer can either integrate a token swap feature into their app or build and run a full-blown exchange without dealing with complex backend mechanisms.
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