How to these DEX traders deposit fiat into this system? You say 'user deposits btc, traders' equivalent amount of fiat is released to user'....but how does that fiat go to escrow?
As a trader, you first verify your account and transfer fiat to a secure escrow account with Plutus.it, which then enables you to create an order on the DEX. The web interface is similar to a traditional exchange with the difference that you must specify your own payout address to receive Bitcoin or Pluton directly.
By placing the funds in escrow, traders guarantee that Plutus app users will have their (BTC/ETH/PLU) deposits requests filled immediately. And because the BTC is sent directly by the app user to the private Bitcoin address that you have provided for the trade, there is no need to store or escrow any Bitcoins on the platform itself for the trader. This means that Plutus operates entirely without holding any digital assets.
You can read more information on how the DEX works over here:
https://medium.com/@PlutusIT/what-is-the-plutusdex-and-why-is-it-the-most-important-part-of-our-platform-b33ffae6f8c2#.knnxm0qt6