How does the EtherEx cryptocurrency exchange work?
EtherEx is built up of many contracts on Ethereum. The contracts interact with each other to make trades. In order to use EtherEx, users put in trade information and send funds to a contract which then executes the trade. Once the contract receives both sides of the trade it sends the funds to the respective parties involved. The contracts of EtherEx hold the funds so they are always safe from everyone, including the creators of EtherEx.
Will the interface feel the same as the centralized exchanges we are used to?
Our goal is to create a decentralized exchange that looks and feels like a normal exchange on the surface. It will not be a glorified craigslist where users match up trade ads but instead will be a fully functioning exchange with an orderbook where users can do both limit and market orders and much more.
Which coins will you support?
EtherEx will support ETH/BTC at launch and we are planning to have most major altcoins supported on the same day. It is possible EtherEx may start with ETH/BTC only and add altcoins later, but a full launch is what we're aiming for and we'll be working very hard to make it possible. We'll keep everyone updated on this before the launch date.
What about fiat?
Fiat brings its own set of challenges, especially with a decentralized exchange. We hope to provide a fiat solution in the future and although we cannot share how and when that will happen, rest assured that it is one of our priorities. Keep in mind, we're creating EtherEx to allow you to trade while controlling your own money and crypto in the most efficient way.
Will you incorporate advanced financial tools that Ethereum is designed to support?
Yes! We plan to offer margin trading, hedging derivatives, options and much more. Our goal for launch is to have a functioning exchange and over time we will support advanced financial trading.
What will the trading fees be?
We are still in the process of determining the right balance for generating income for operations. Our goal is to make our company operational so that we can continue to provide all of the features we want to build out in the future. However, the customer is #1 in our mind and will continue to be as we hash out our operational model. At most, fees will still be less than the majority of our competition.
How fast will your trade times be?
Because EtherEx is run on the Ethereum blockchain we are limited to the speed at which new blocks are mined. The target for Ethereum is one block every minute. It will take roughly this amount of time to verify that the trade has taken place before you can trade that same cryptocurrency again. The trades and orderbook would be updating as the transactions propagate through the network, while the next block gets mined. This will make it impossible for HFT bots to operate on EtherEx which will lead to a more fair exchange for everyone involved.
How will cryptocoins that are not on the ethereum blockchain (BTC, LTC, etc) work on EtherEx?
The first version of Ethereum will not be able to store off chain cryptocoins in contracts. Therefore, we are tasked in the short term with finding a way to incorporate these into our trading engine while also sticking to our core principals of openness and decentralization. We are exploring many options and think a combination of resources currently available to the public (such as multisig wallets) will give us the ability to make this happen efficiently. Once a future version of Ethereum fully supports off chain cryptos, this will be a much easier task.
How secure will EtherEx be?
Coins that have their own blockchain (BTC, LTC, DOGE, etc) will be held in either side chains or trusted 3rd party multisignature wallets. Coins that exist on ethereum (ether, DAO stocks, subcurrencies made in ethereum, etc) will be held in the contracts themselves. This aspect of decentralization makes the whole system much more secure than a centralized exchange. To test our security, part of the Developer Fund will be a large bounty to anyone who can find a critical exploit in EtherEx code.
Is it possible to DDOS the exchange?
What happens if your website goes down from an attack?
Not much. Because the core of the exchange will be running on Ethereum, EtherEx will just keep running normally. EtherEx will however provide the first web interface and API, and it would be unavailable (from the website only) in the case of an outage. However, the trading engine will never depend on us. You still will be able to trade using any other local or hosted client. EtherEx might provide a branch of the C++ or Python client with integrated functions for the exchange at launch for easier trading without the web interface, and clients in other languages might follow but we prefer concentrating our efforts in a single, well-made client. Not to mention anyone will be able to write one in their language of choice.
Will traders be anonymous on EtherEx?
Yes and no. As everything is done by Ethereum addresses it really depends on how much caution the individual user takes. We will not require any identity documents or verify who you are.
Will there be a daily withdrawal limit?
No. As the crypto belongs to you, you are free to do with it as you please. In fact it is impossible for us to set any withdrawal limit as we never have that type of control over your crypto.
How are you funding this?
We have been funding the project ourselves so far.
Will you bring on more developers/team members as EtherEx grows?
We will implement our own sub-currency that will be used as the currency of EtherEx. This gives us the ability to bring on more developers with the option to pay them in our own sub-currency at the launch of EtherEx. Each person on the project will be invested in an asset tied to the success of our exchange, which gives the developers an incentive to create a flourishing ecosystem. Our users will also be able to invest in this ecosystem in the future. Our goal is to get a top notch team of developers involved with EtherEx to keep it on the cutting edge.
When will you release the code?
We are currently getting other developers involved to review and work on the current codebase. As it's still very early in the development process, even for Ethereum itself, more work is needed before we publish. We are still looking at releasing the source code as soon as possible to allow early collaboration, hopefully within a few weeks.
How can I help make sure this exchange succeeds?
We've put a BTC donation link where you can send us funds if you'd like to help build out the exchange. Also, we ask that you tell everyone you know about project and point them to our website and social media links below.
When will EtherEx launch?
Since EtherEx is built on Ethereum, we need to wait for its release before we can go live. Ethereum's launch is currently planned for Q4 2014 and we'll be working day and night to have EtherEx up on the same day. If the Ethereum network is delayed, so will EtherEx. We will keep everyone updated on our schedule and launch date as we get closer.
A decentralized exchange needs an advanced cryptocurrency network to even exist and, most importantly, to be secure. Ethereum is that network. EtherEx will make full use of Ethereum's decentralized contracts to run the exchange, and those contracts will be open source. Everyone will be able to take a look at the inner workings of the exchange, verify it is safe and does what it is supposed to. This means full transparency of the exchange. Nothing will be hidden.