The growing number of hacking incidents against cryptocurrency exchanges and the subsequent need for stronger security measures has raised a question on the business model of these institutions. Despite dealing with blockchain technology through the cryptocurrencies that they trade every day, exchanges remain wary of using the technology within their own systems to stand against malicious cyber attacks.
The same line of thought originated the idea of decentralized exchanges (DEXs), which operate solely on blockchain technology and could remain far safer than their “centralized” counterparts.
Switcheo is one such decentralized cryptocurrency exchange that despite having launched very recently, aims to revolutionize the industry by offering solutions that do not only meet the needs of new and seasoned traders alike, but also provide them with the utmost security and transparency that they desire with their funds.
So let’s delve into further details about this DEX in order to learn more about its operations, its functions, its overall service, and its plans for the future.
History of Switcheo
Built on NEO, Switcheo is one of the first DEX solutions on the increasingly popular blockchain platform.
Switcheo has launched just over two months ago in March 2018, with its initial coin offering (ICO) launching on the platform for the public on March 16, only to be sold out within a day.
The overwhelming demand of the platform and its native token SWH was evident of the fact that the community was in dire need of a DEX especially coming from a promising platform such as NEO.
Following its successful ICO, Switcheo went live days after the completion of the crowdsale. The exchange debuted the fully functional product of its DEX through its web-based platform.
The project was co-founded by three individuals, Ivan Poon, Henry Chua, and Jack Yeu, who serve as Switcheo’s CEO, CTO, and CCO, respectively. Whereas, the platform’s blockchain developer is Sng Ping Chiang who is responsible for the end-user delivery of the solutions along with other key members of the team.
At the time of writing this guide, the Switcheo team is working on a major upgrade to its exchange protocol, during which it has already introduced an improved version of its SWH tokens, which it has named as SWTH.
The upgrade to its token was introduced as version 1.5 of the Switcheo platform. The tokens are to be swapped for all SWH holders including Gate.io, which is the only other exchange that deals in SWH. The swap for SWTH to SWH will be carried out at 1:1, which simply means that all circulating supply of SWH will now be known as SWTH.
According to the official word from Switcheo, more than 80 percent SWH tokens have been swapped with SWTH.
For the sake of clarification in this guide, we will be referring to old iterations of SWH as SWTH.
Switcheo Review: What Does Switcheo Do?
Switcheo offers a way to easily and quickly trade cryptocurrencies through its DEX platform without compromising efficiency and security.
The exchange’s interface operates on the web through usual web browsers, and the Switcheo team recommends that the instance runs through Chrome in Incognito mode so that users are always presented with the latest version of the exchange.
However, the Switcheo platform is not available through a downloadable desktop or mobile application.
Since it is built on the NEO blockchain, Switcheo offers NEO, GAS, and other NEP-5 tokens through its platform (NEP-5 is the NEO token standard, followed by all tokens on the NEO platform).
The tokens available through Switcheo include but are not limited to Red Pulse (RPX), TheKey (TKY), Bridge Protocol (IAM), and Trinity Network (TNC). Due to the way that Switcheo is built, all NEP-5 tokens can be made available to trade through the platform as soon as their respective ICO gets completed.
Switcheo plans to add more tokens to its offerings as it moves forward with establishing itself as a stable DEX.
Despite using the cutting-edge solutions of blockchain technology, Switcheo provides a classic interface that would seem familiar to experienced cryptocurrency traders while also being welcoming to new cryptocurrency users.
Switcheo Review: How Does Trading on Switcheo Work?
Trading on Switcheo works like other major exchanges, where orders are executed when users post buy and sell orders on the trading platform. NEO, GAS, and SWTH are used as default trading pairs with NEP-5 tokens.
Much like traditional cryptocurrency exchanges, Switcheo offers their trading through a Maker-Taker platform.
In the Maker-Taker mechanism, when someone posts an order to the market which does not get fulfilled right away, it gets them branded as a Maker since they are adding to the liquidity of the market.
Whereas, when someone posts an order that gets executed by matching a pre-existing order on the books, they get branded as a Taker due to taking away from the market’s liquidity.
The trading details are displayed in real time, and with the major update that the Switcheo team plans to bring to the platform in the form of version 2.0, the traders have the ability to see exact timestamps on the trades executed through the exchange.
In its current state, the orders on Switcheo are displayed with different status markers which tell users their latest status with as much clarity as possible.
A Filling order refers to an order that is currently pending on the order books. A Filled order signifies an order’s fulfillment. Success means that the trade was successful. Whereas Failed and Cancelled orders are self-explanatory.
At the moment, trades on the Switcheo platform take around 30 seconds to complete. You would think that it is a fast enough speed for a cryptocurrency exchange to be content with its transaction time, but Switcheo wants to take it one step further and would thus have instant transactions made possible when its v2 is implemented within the span of a few weeks.
Switcheo Review: Fees
The fee structure at Switcheo is very simple.
There is no fee for order Makers, whereas order Takers are charged a trading fee of 0.15 percent. Furthermore, that 0.15 percent can be slashed to 0.075 percent if traders opt to pay the transaction fee in SWTH.
If you thought that it was economical enough on its own, then you might be delighted to know that Switcheo does not charge any withdrawal fee to its users at all.
According to CoinMarketCap, SWTH is currently being traded at $0.54.
How to Sign Up With Switcheo?
Signing up with Switcheo is easy, and a walk in the park if you are already a user of the NEO blockchain.
All that users have to do is to sign-up using their current wallet information. If they already have an NEO wallet, they can integrate it within the Switcheo system. If not, then they can create one through services such as NEO Tracker or NEON Wallet in order to access and utilize their funds through Switcheo.
This remains as one of the simplest sign-up methods among cryptocurrency exchanges, especially when you compare it with centralized exchanges.
However, there is a reason for it. Switcheo does not deal in fiat and thus needs fewer regulations than other exchanges. Needless to say, this comes with its own pros and cons, where users are limited by trading options but are offered faster sign-ups and more privacy as a result.
Switcheo Review: How to Deposit or Withdraw Funds on Switcheo?
One of the appealing aspects of the exchange is the fact that it simple and user-friendly. Decentralized exchanges are not typically the easiest to use and Switcheo seeks to step it up a notch.
This is seen across their platform, from signing up to their wallet integration process.
Users do not have to transfer funds from their existing NEO wallet to a wallet dedicated to Switcheo. They can connect their existing wallet with the Switcheo platform to start using the DEX’s services.
Signing in with their private keys to connect their wallet to the Switcheo platform is also optional for users. Switcheo assures users that private keys used to access the wallet interface will not be seen by its staff.
If a user does not want to share their private key, then they can choose to upload their wallet key file to the Switcheo exchange interface in order to directly access their funds without ever sharing them with the Switcheo platform.
Through this method of integrating users’ own primary wallets within the platform, Switcheo gives users complete control over their funds where the funds are only transferred when a trade is posted by the user.
Switcheo Review: Security
Switcheo is a completely decentralized exchange that is built on the NEO blockchain platform, and thus remains safe from hacking attempts of the kind which centralized exchanges are exposed to every single second of the day.
Furthermore, since Switcheo does not store users’ funds in its own wallets and gives the user complete control by integrating their existing NEO wallet within its platform, the funds are never held by Switcheo.
This mechanism in itself sets Switcheo apart from the other existing cryptocurrency exchanges, whether they remain centralized or decentralized.
Switcheo Review: Customer Service
Switcheo has a direct message interface available through its Support platform, where the team typically replies within a few hours. In addition to that, the Switcheo team is also readily available and active on social media platforms such as Reddit and Telegram.
Does Switcheo Live up to the Hype?
The users who supported Switcheo during its launch had high expectations from the platform, hoping that it would make cryptocurrency trading easier and safer for everyone.
It seems that the DEX did fulfill the expectations that it built on paper, since in its current state, the Switcheo platform seems to be leveraging NEO blockchain’s speed, reliability and security effectively.
However, Switcheo aims to not just be another DEX and be the best in the sub-segment alone, but it plans to play in the big leagues in order to compete side by side with its centralized counterparts.
This approach was reiterated by Switcheo CEO Ivan Poon during a recent Reddit AMA, where he shared future plans for the platform and also its end goal of becoming the best in the industry by providing solutions that would set it apart from its competitors:
“We see ourselves competing with Binance, Huobi, etc., not other DEXs. The ratio of trading volume at the moment is skewed heavily towards existing traditional centralized exchanges. So while those in the loop may be looking at DEX competitors and are doing such comparisons – as a business we instead have to look towards where the actual trading volume is at. We need to target that crowd and strategize on how we can pull in the volume from those users, rather than trying to “compete” with a non-existent product.”
Ivan was answering a question related to another planned DEX on the NEO blockchain by the name of NEX. At the time of writing, NEX is still under development with a delayed ICO and no public implementation of its finished product.
With NEO garnering more and more attention by each passing day, it is safe to say that the network will see growth in its overall user base with an increased number of NEP-5 tokens. By establishing itself as an early provider of exchange solutions in the NEO ecosystem, Switcheo is on the path for growth in this flourishing sector.
What would make it even better is if it implements updates to allow cross-blockchain token swaps with popular assets such as Bitcoin and Ethereum.
It remains to be seen whether Switcheo would be able to maintain its status of performing fast and efficient transactions when it grows from having only a few hundred users to thousands of consumers – as that is where the real challenge lies.
However, seeing what the Switcheo team has achieved so far, it can be said that it would be up for the challenge.
As of now, the platform remains as one of the best options available to trade NEP-5 tokens. That being said, its lack of mobile applications does hold it back from being utilized by users who are used to apps such as the popular cryptocurrency exchange Coinbase or the software wallet Coinomi which users other exchanges, Shapeshift and Changelly as its integrated trading solution providers.