[AST] 🔥 AIRSWAP: Peer-to-peer Decentralized Marketplace backed by ConsenSys

[ovedm606]

Oved here-- Of course we care, and really sorry for the late response, things are pretty crazy as you can imagine.  Always happy to engage and I especially enjoy speaking with people that have strong experience in financial markets.  You've pointed out two of the considerations in the design that we have thought about pretty extensively.  Happy to try to answer, and feel free to ask any follow ups.

The Indexer is a location to search for other counterparties, whether the counterparty can be defined in any number of ways (a market maker, retail, even an order book).  There is no pricing information stored in the Indexer.  You only need the indexer to find counterparties, and once they are found, you can connect directly to parties and negotiate prices privately peer-to-peer.  This is similar to Google, where you will use Google to find a website, but once the website is found, there is no need for Google anymore. 

You are right that in it's current form the Indexer may filter current results.  They may require KYC, they may not allow certain countries.  This is probably a feature that you would want to remove certain bad actors from the system. 

The downside of this is that there may be collusion between makers and indexers as you describe, but in our opinion that isn't very damaging.  All this will do is remove the ability for certain parties to quote and trade with each other, and if that occurs, they can likely find counterparties elsewhere, and still have the ability to analyze the pricing information they receive on later steps through the process. I believe the manipulation you describe IS very damaging in the case where pricing information is being manipulated in the order book itself.  That has direct implications to pricing, whereas manipulation of counterparty discovery is less clear.

We are considering other methods of making the Indexer more transparent, for example broadcasting or moving certain functions on-chain, but haven't found this to be a show stopper just yet so we probably need to test and gather feedback.  Yours is of course well received.

The "free option" problem is a known problem in financial markets and we made the design consideration of giving takers this free option, because makers are likely better positioned to price this risk in.  If we gave the free option to makers, IMO that would create a less fair system as takers may be less sophisticated to be able to price this in.  As you mention, the maker can always race to the chain to cancel if the price moves far away from value.  Again, this is a known problem and there are exit conditions that will allow the maker to mitigate their risk.

Also, if you are seeking to exploit these free options and connect to many makers, you won't need to hold the AST token, as holding the token is only required to write (not read) to the Indexer

Hope this helps and feel free to ask any follow ups, I'll get to them as soon as possible.

Thank you,

Michael Oved

[1714978698]

1714978698

[1714978698]

1714978698

[1714978698]

1714978698

[seanzhang]

For those interested in asking more questions you can speak with a big community and the tem in Telegram > https://t.me/airswap

Nice and easy way to keep up to date with whats happening!

[justbruce]

Hi Michael,

Thanks for taking the time to respond, especially during such a busy time, and also thank you for pointing out that I don’t need to purchase the token to get access to the free options :-).

I completely agree with you that being able to manipulate pricing information would clearly be very damaging and recognize that the protocol take steps to prevent that.  However, I still believe the protocol leaves room for front-running.  For example, if I’m an indexer and also running a taker and determine that there is a particular maker or small subset of makers that is offering consistently better pricing than the others, I may choose not to call foundIntent on new takers (or some small subset of takers to reduce the chance of detection) for that set of makers.  Instead, I will call foundIntent with all the other makers along with a maker that I run.  My maker will simply relay getPrice calls onto the makers offering better pricing, take their best price, mark it up a bit, and then return that to the takers, effectively front-running them. I think it’s reasonable to assume that there will be makers offering pricing better than what the oracle is returning, so there would be room for me to do this and still be inline with oracle pricing.

Regarding the free option problem, I am certainly not advocating giving the option to the makers.  After doing some further reflection and back of the envelope calculation agree that this risk could be priced with minimal impact on spreads, at least for smaller orders and assume that marker makers will do so.  I also assume market makers will implement some sort of throttling based on taker addresses that will hamper my ability to purchase unlimited options.  So I see the free vol. problem both as a less of a concern and less of an opportunity at this point.

My other concerns had to do with lack of transparency into the oracle protocol but I assume that more information will be coming in time and look forward to reading it.

Finally, according to the roadmap, the smart contract will be ready on or around October 10th.  I just wanted to confirm that anyone with a mechanism to bring makers and takers together outside of the official Airswap indexer would be free to use the contract for settlement from that date on or is something else required?

Thanks again for your original reply and no need to get back to me on this one anytime soon as I understand you are busy.

Oved here-- Of course we care, and really sorry for the late response, things are pretty crazy as you can imagine.  Always happy to engage and I especially enjoy speaking with people that have strong experience in financial markets.  You've pointed out two of the considerations in the design that we have thought about pretty extensively.  Happy to try to answer, and feel free to ask any follow ups.

The Indexer is a location to search for other counterparties, whether the counterparty can be defined in any number of ways (a market maker, retail, even an order book).  There is no pricing information stored in the Indexer.  You only need the indexer to find counterparties, and once they are found, you can connect directly to parties and negotiate prices privately peer-to-peer.  This is similar to Google, where you will use Google to find a website, but once the website is found, there is no need for Google anymore. 

You are right that in it's current form the Indexer may filter current results.  They may require KYC, they may not allow certain countries.  This is probably a feature that you would want to remove certain bad actors from the system. 

The downside of this is that there may be collusion between makers and indexers as you describe, but in our opinion that isn't very damaging.  All this will do is remove the ability for certain parties to quote and trade with each other, and if that occurs, they can likely find counterparties elsewhere, and still have the ability to analyze the pricing information they receive on later steps through the process. I believe the manipulation you describe IS very damaging in the case where pricing information is being manipulated in the order book itself.  That has direct implications to pricing, whereas manipulation of counterparty discovery is less clear.

We are considering other methods of making the Indexer more transparent, for example broadcasting or moving certain functions on-chain, but haven't found this to be a show stopper just yet so we probably need to test and gather feedback.  Yours is of course well received.

The "free option" problem is a known problem in financial markets and we made the design consideration of giving takers this free option, because makers are likely better positioned to price this risk in.  If we gave the free option to makers, IMO that would create a less fair system as takers may be less sophisticated to be able to price this in.  As you mention, the maker can always race to the chain to cancel if the price moves far away from value.  Again, this is a known problem and there are exit conditions that will allow the maker to mitigate their risk.

Also, if you are seeking to exploit these free options and connect to many makers, you won't need to hold the AST token, as holding the token is only required to write (not read) to the Indexer

Hope this helps and feel free to ask any follow ups, I'll get to them as soon as possible.

Thank you,

Michael Oved

[ovedm606]

That is a really neat edge case on Indexer and taker colluding, I now see the ability to manipulate and arb the most aggressive makers in the system.  It's funny because we socialized the idea in many Ethereum meet ups (SF, Seoul, Hong Kong, Singapore, Tokyo, Paris, Boston) but did not receive this feedback, although we did receive feedback on the Oracle protocol (more on that below).   

Because the Indexer should be public locations where users can broadcast and find information, I believe collusion would be easy to audit and discover abuse by makers.  So if for example a maker is publishing intent, they should be able to run an independent taker that would check to see and find that intent.  If they find the indexer is being manipulated, they can choose to find and support a different party that they believe is more fair. 

Glad to hear we are on the same page wrt free option.

The Oracle protocol will likely need to be open source and transparent.  This was one of the main pieces of feedback we received on our tour and so we incorporated new functionality into the AirSwap Token (AST) where holders can vote on Oracle updates.  While this mechanism will be challenging to implement, we think it will be necessary to achieve transparency and also can have some really positive benefits on the future of trading as a whole. For example, what if market making algorithms were inserted directly into Oracles, and users were simply able to use this pricing to trade peer to peer at "fair value" and with all things "priced in" without the need for expensive market making algorithms to be written and run independently by parties in the system?  I know this is slightly counterintuitive to competitive financial markets and somewhat utopian, but I believe that if the Oracle system is implemented correctly it has the opportunity to create a new paradigm where markets are truly peer-to-peer and fair (who really cares about getting an extra 0.0001 on a trade?  retail players certainly don't).

You are correct that the decentralized exchange contract will be free to use by anyone in the ecosystem, and will not be tied down with a fee or the requirement to be connected to Indexers.

Hi Michael,

Thanks for taking the time to respond, especially during such a busy time, and also thank you for pointing out that I don’t need to purchase the token to get access to the free options :-).

I completely agree with you that being able to manipulate pricing information would clearly be very damaging and recognize that the protocol take steps to prevent that.  However, I still believe the protocol leaves room for front-running.  For example, if I’m an indexer and also running a taker and determine that there is a particular maker or small subset of makers that is offering consistently better pricing than the others, I may choose not to call foundIntent on new takers (or some small subset of takers to reduce the chance of detection) for that set of makers.  Instead, I will call foundIntent with all the other makers along with a maker that I run.  My maker will simply relay getPrice calls onto the makers offering better pricing, take their best price, mark it up a bit, and then return that to the takers, effectively front-running them. I think it’s reasonable to assume that there will be makers offering pricing better than what the oracle is returning, so there would be room for me to do this and still be inline with oracle pricing.

Regarding the free option problem, I am certainly not advocating giving the option to the makers.  After doing some further reflection and back of the envelope calculation agree that this risk could be priced with minimal impact on spreads, at least for smaller orders and assume that marker makers will do so.  I also assume market makers will implement some sort of throttling based on taker addresses that will hamper my ability to purchase unlimited options.  So I see the free vol. problem both as a less of a concern and less of an opportunity at this point.

My other concerns had to do with lack of transparency into the oracle protocol but I assume that more information will be coming in time and look forward to reading it.

Finally, according to the roadmap, the smart contract will be ready on or around October 10th.  I just wanted to confirm that anyone with a mechanism to bring makers and takers together outside of the official Airswap indexer would be free to use the contract for settlement from that date on or is something else required?

Thanks again for your original reply and no need to get back to me on this one anytime soon as I understand you are busy.

Oved here-- Of course we care, and really sorry for the late response, things are pretty crazy as you can imagine.  Always happy to engage and I especially enjoy speaking with people that have strong experience in financial markets.  You've pointed out two of the considerations in the design that we have thought about pretty extensively.  Happy to try to answer, and feel free to ask any follow ups.

The Indexer is a location to search for other counterparties, whether the counterparty can be defined in any number of ways (a market maker, retail, even an order book).  There is no pricing information stored in the Indexer.  You only need the indexer to find counterparties, and once they are found, you can connect directly to parties and negotiate prices privately peer-to-peer.  This is similar to Google, where you will use Google to find a website, but once the website is found, there is no need for Google anymore. 

You are right that in it's current form the Indexer may filter current results.  They may require KYC, they may not allow certain countries.  This is probably a feature that you would want to remove certain bad actors from the system. 

The downside of this is that there may be collusion between makers and indexers as you describe, but in our opinion that isn't very damaging.  All this will do is remove the ability for certain parties to quote and trade with each other, and if that occurs, they can likely find counterparties elsewhere, and still have the ability to analyze the pricing information they receive on later steps through the process. I believe the manipulation you describe IS very damaging in the case where pricing information is being manipulated in the order book itself.  That has direct implications to pricing, whereas manipulation of counterparty discovery is less clear.

We are considering other methods of making the Indexer more transparent, for example broadcasting or moving certain functions on-chain, but haven't found this to be a show stopper just yet so we probably need to test and gather feedback.  Yours is of course well received.

The "free option" problem is a known problem in financial markets and we made the design consideration of giving takers this free option, because makers are likely better positioned to price this risk in.  If we gave the free option to makers, IMO that would create a less fair system as takers may be less sophisticated to be able to price this in.  As you mention, the maker can always race to the chain to cancel if the price moves far away from value.  Again, this is a known problem and there are exit conditions that will allow the maker to mitigate their risk.

Also, if you are seeking to exploit these free options and connect to many makers, you won't need to hold the AST token, as holding the token is only required to write (not read) to the Indexer

Hope this helps and feel free to ask any follow ups, I'll get to them as soon as possible.

Thank you,

Michael Oved

[cchub]

This project seems to be quite promising. I'll take a closer look at it.
I believe they should have made use of bounty promotion as well, so that the community can spread out the word about it more and more.

[ICOHunt]

What will the total token supply be?

[newfagelite]

Don't understand the amount of hardcap... Anyway, hope i will make it to the whitelist 

[justbruce]

Hi Michael,

Congratulations on the successful pre-sale.

I agree it’s an edge case and there are straightforward steps that could be taken to detect this.  Of course, if this sort of attack was not on your radar screen you may not choose to take these steps or if even you detected such behaviour (especially in the case where this was performed in a random manner on a small subset of takers) you may just chalk it up to a system glitch/capacity problem and continue to do business with the indexer….

The Oracle protocol is one of the most interesting parts of this projects for me and I look forward to learning more about the algorithm as it develops.

It's good to know that the contract will be available to the entire ecosystem and not tied down with a fee.  I could imagine someone offering an algo that accessed the liquidity available across multiple indexers (both as a maker and taker) or perhaps a trading front end that built an “order book” with all the various maker quotes and allowed the end user to click and trade off of it. 

Unless my understanding of the how the smart contract works is incorrect, I believe this would entail entrusting the algo/trading application with a private key that gave it unconditional access to your ERC20 tokens.  However, I imagine the contract could be extended to optionally associate funds with a separate key (different from the actual address which held the tokens) and this key could be only be used to authorize exchanges with some subset of other tokens up or down to some limit price.  Is this something that makes sense or are you working on something else that would enable you to access/trade indexer liquidity through a third party application or service without having to trust that service with your wallet  key?

That is a really neat edge case on Indexer and taker colluding, I now see the ability to manipulate and arb the most aggressive makers in the system.  It's funny because we socialized the idea in many Ethereum meet ups (SF, Seoul, Hong Kong, Singapore, Tokyo, Paris, Boston) but did not receive this feedback, although we did receive feedback on the Oracle protocol (more on that below).   

Because the Indexer should be public locations where users can broadcast and find information, I believe collusion would be easy to audit and discover abuse by makers.  So if for example a maker is publishing intent, they should be able to run an independent taker that would check to see and find that intent.  If they find the indexer is being manipulated, they can choose to find and support a different party that they believe is more fair. 

Glad to hear we are on the same page wrt free option.

The Oracle protocol will likely need to be open source and transparent.  This was one of the main pieces of feedback we received on our tour and so we incorporated new functionality into the AirSwap Token (AST) where holders can vote on Oracle updates.  While this mechanism will be challenging to implement, we think it will be necessary to achieve transparency and also can have some really positive benefits on the future of trading as a whole. For example, what if market making algorithms were inserted directly into Oracles, and users were simply able to use this pricing to trade peer to peer at "fair value" and with all things "priced in" without the need for expensive market making algorithms to be written and run independently by parties in the system?  I know this is slightly counterintuitive to competitive financial markets and somewhat utopian, but I believe that if the Oracle system is implemented correctly it has the opportunity to create a new paradigm where markets are truly peer-to-peer and fair (who really cares about getting an extra 0.0001 on a trade?  retail players certainly don't).

You are correct that the decentralized exchange contract will be free to use by anyone in the ecosystem, and will not be tied down with a fee or the requirement to be connected to Indexers.

Oved here-- Of course we care, and really sorry for the late response, things are pretty crazy as you can imagine.  Always happy to engage and I especially enjoy speaking with people that have strong experience in financial markets.  You've pointed out two of the considerations in the design that we have thought about pretty extensively.  Happy to try to answer, and feel free to ask any follow ups.

The Indexer is a location to search for other counterparties, whether the counterparty can be defined in any number of ways (a market maker, retail, even an order book).  There is no pricing information stored in the Indexer.  You only need the indexer to find counterparties, and once they are found, you can connect directly to parties and negotiate prices privately peer-to-peer.  This is similar to Google, where you will use Google to find a website, but once the website is found, there is no need for Google anymore. 

You are right that in it's current form the Indexer may filter current results.  They may require KYC, they may not allow certain countries.  This is probably a feature that you would want to remove certain bad actors from the system. 

The downside of this is that there may be collusion between makers and indexers as you describe, but in our opinion that isn't very damaging.  All this will do is remove the ability for certain parties to quote and trade with each other, and if that occurs, they can likely find counterparties elsewhere, and still have the ability to analyze the pricing information they receive on later steps through the process. I believe the manipulation you describe IS very damaging in the case where pricing information is being manipulated in the order book itself.  That has direct implications to pricing, whereas manipulation of counterparty discovery is less clear.

We are considering other methods of making the Indexer more transparent, for example broadcasting or moving certain functions on-chain, but haven't found this to be a show stopper just yet so we probably need to test and gather feedback.  Yours is of course well received.

The "free option" problem is a known problem in financial markets and we made the design consideration of giving takers this free option, because makers are likely better positioned to price this risk in.  If we gave the free option to makers, IMO that would create a less fair system as takers may be less sophisticated to be able to price this in.  As you mention, the maker can always race to the chain to cancel if the price moves far away from value.  Again, this is a known problem and there are exit conditions that will allow the maker to mitigate their risk.

Also, if you are seeking to exploit these free options and connect to many makers, you won't need to hold the AST token, as holding the token is only required to write (not read) to the Indexer

Hope this helps and feel free to ask any follow ups, I'll get to them as soon as possible.

Thank you,

Michael Oved

[jiya jaena]

no plan about bounties sir? i'm waiting for this information. 

[hammo]

I have registered to whitelist and i want to buy this token. Is there any way to buy more ?

[TokensFund.io]

I have registered to whitelist and i want to buy this token. Is there any way to buy more ?

I guess only exchanges. I heard about 10k people registered for the AirSwap white list on first day.

[Syroamst]

We rated AirSwap as "High Interest" on ICO Drops (https://icodrops.com/airswap/). Do not forget to register on the Whitelist. It's only a little time left.

I think it will be "5 min Token Sale", because very small main sale cap (12m$)

[Granturismo777]

Registration is over! So quickly, much earlier term.
One more hype ICO.

[kellendil]

Registration is over! So quickly, much earlier term.
One more hype ICO.

I have registered the whitelist. When will it be clear when the application is accepted or rejected ? I hope it would not be a very low investment per person. It is realy profitable project.

[CryptoGatherer]

I have some questions. Is AirSwap an investment token or just a credit token? Seems more like a credit token. What’s in it for the investor? What is the upside for an investor?

[Granturismo777]

I have registered the whitelist. When will it be clear when the application is accepted or rejected ? I hope it would not be a very low investment per person. It is realy profitable project.

It is realy profitable project. After start trading into the exchange x2 - is minimum.
But unfortunately the number of registration has exceeded 15000 - thus individual hard cap <3 ETH

[kacakkipri]

I have registered the whitelist. When will it be clear when the application is accepted or rejected ? I hope it would not be a very low investment per person. It is realy profitable project.

It is realy profitable project. After start trading into the exchange x2 - is minimum.
But unfortunately the number of registration has exceeded 15000 - thus individual hard cap <3 ETH

You can not be serious. will the investment right really be that low?    I have read something about whitelist on Twitter today. They wrote the last day for your updates. I think it is important that your application is accepted or not. We can update accordingly.

[Granturismo777]

I have registered the whitelist. When will it be clear when the application is accepted or rejected ? I hope it would not be a very low investment per person. It is realy profitable project.

It is realy profitable project. After start trading into the exchange x2 - is minimum.
But unfortunately the number of registration has exceeded 15000 - thus individual hard cap <3 ETH

You can not be serious. will the investment right really be that low?    I have read something about whitelist on Twitter today. They wrote the last day for your updates. I think it is important that your application is accepted or not. We can update accordingly.

Last ifnormation



42 000 ETH / ~13 000 = 3,2 ETH individual hard cap

[dimitri]

looking forward to this one ... good luck devs

[sexcoyote]

They have reopened their whitelist for registered account.