Project introductionSerum is a cross-chain decentralized transaction protocol of the Solana ecosystem based on order book. It is mainly launched by Sam Bankman-Fried, founder of FTX.
Therefore, Serum can be regarded as a decentralized “FTX”. The market logic of Serum’s launch is: Currently, the DEXs based on Ethereum, such as Uniswap and Sushiswap, are all in the AMM (automated market making) model. This DEX model does not need the high-throughput transaction required by the Order Book model, and popularized on-chain transactions. However, the Ethereum-based DEXs still have scalability problems, such as the high gas fee and inability to handle high throughputs. As a result, the loss from the high-frequency and small-value transactions would outweigh the gains.
To solve the problems, Solana, an infrastructure with better scalability, lower gas cost and greater throughput, was chosen and the Order Book model-based Serum was born. This combination will offer more possibilities for high-frequency and small-value transactions in the market. (Note: Solana’s TPS can reach up to 5,000,000)
Serum users can trade based on the Order Book mechanism. The mechanism can achieve prelisting and high-frequency trading through high transaction speed and low handling fees, making the long tail market more liquid.
In addition, Serum is not a DEX in a single ecosystem, but defined as a cross-chain DEX from the beginning to completely open up the cross-chain asset trading market:
· Serum has interoperability with Ethereum and ERC-20 assets;
· Serum assets will also flow into Ethereum;
· Serum provides a Bitcoin cross-chain scheme;
· Serum provides a solution to stabilize the dollar.
In terms of transaction ecosystem, Serum has improvements in the following:
· The native asset SRM can be used to reduce transaction costs or other uses;
· Cross-chain swap, trustless cross-chain asset swap;
· Order book: a decentralized order book, which can be used to submit limit orders. Besides, transaction matching is also automatically executed on the chain;
· Ethereum and Solana can be fully integrated: Solana can make Serum fast and efficient, and has interoperability with Ethereum’s ecosystem or ERC20 assets;
· Cross-chain contracts for physical delivery: users will be allowed to trade margin positions based on Serum;
· fBTC (SerumBTC) a trustless Bitcoin cross-chain generation mechanism. The asset SerumBTC that is pegged to the value of Bitcoin and can be issued in Ethereum or Solana;
· fUSD (SerumUSD): Decentralized dollar stable currency generation mechanism, which avoids the single point of failure of other stable currencies.
At present, Serum’s partners include many Solana ecosystem projects such as the AMM protocol Raydium, the front-end platform Bonfida, the application scenario Maps.me 2.0, the lending protocol Oxygen, etc.
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