Platt, M;
Pierangeli, F;
Livan, G;
Righi, S;
(2020)
Facilitating the Decentralised Exchange of Cryptocurrencies in an Order-Driven Market.
In:
Proceedings of 2020 2nd Conference on Blockchain Research & Applications for Innovative Networks and Services (BRAINS).
(pp. pp. 30-34).
IEEE: Paris, France.
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Abstract
This article discusses a protocol to facilitate decentralised exchanges on an order-driven market through a consortium of market services operators. We discuss whether this hybrid protocol combining a centralised initiation phase with a decentralised execution phase outperforms fully centralised exchanges with regards to efficiency and security. Here, a fully efficient and fully secure protocol is defined as one where traders incur no trading costs or opportunity costs and counterparty risk is absent. We devise a protocol addressing the main downsides in the decentralised exchange process that uses a facilitating distributed ledger, maintains an order book and monitors the order status in real-time to provide accurate exchange rate information and performance scoring of participants. We show how performance ratings can lower opportunity costs and how a rolling benchmark rate of verifiable trades can be used to establish a trustworthy exchange rate between cryptocurrencies. The formal validation of the proposed technical mechanisms is the subject of future work.
| Type: | Proceedings paper |
|---|---|
| Title: | Facilitating the Decentralised Exchange of Cryptocurrencies in an Order-Driven Market |
| ISBN-13: | 978-1-7281-7091-6 |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1109/BRAINS49436.2020.9223286 |
| Publisher version: | https://doi.org/10.1109/BRAINS49436.2020.9223286 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Cryptocurrencies, Atomic Swap, Cross-Chain Trading, Hashed Time-Locked Contracts (HTLC), Exchange Rates, Order Books, Order-Driven Markets, Quality Scoring |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10114157 |
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