Gridex – the world’s first fully functional Ethereum order book – enhances users’ experience by allowing for more efficient and cost-effective trades.
Generally with decentralized exchanges, trading takes place on-chain, whereas order books are typically compiled off-chain. This is where Gridex shines, bringing something entirely new to our digital realm.
Gridex is a non-custodial trading protocol that utilizes smart, immutable contracts on the Ethereum blockchain to store Ethereum order books. This allows Gridex to offer additional benefits than traditional order books.
But how does Gridex – the first-ever, fully functional Ethereum order book – carry out such an unheard-of achievement, and what are the reasons for doing so?
First and foremost, to understand the need of order books on the blockchain, it’s vital to dig into the downside of traditional order books.
Traditional order books facilitate the trading of financial assets, such as stocks, bonds, and derivatives, between buyers and sellers. These exchanges typically maintain an electronic order book, which is a digital record of all the orders that have been placed in the market by all participants.
However, traditional order books often face several problems:
- Lack of Transparency: Traditional order books can be tough for individual investors to access, which makes it hard to get a full view of the market. Lack of transparency can make it tricky for individual investors to make informed decisions.
- Lack of liquidity: Traditional order books may not always have enough buyers and sellers to match all orders, leading to difficulty for traders to execute orders at desired prices.
- Market manipulation: Traditional order books can be susceptible to market manipulation, like insider trading or spoofing (fake orders to deceive traders) – giving some traders an unfair advantage and distorting the market.
- Slowed trading: Traditional order books can get congested when many orders are placed at once, slowing the trading process and making it harder for traders to execute orders promptly.
Luckily, Gridex utilizes blockchain technology to overcome the issues that traditional models regularly face.
One of the main advantages of Gridex is that its Ethereum order book, (unlike an AMM or off-chain order book) allows users to place orders to buy or sell assets using a smart contract, improving transparency compared to traditional methods.
However, the Ethereum order book has many other notable benefits:
- Transparency: A blockchain is a decentralized, distributed ledger that is open and transparent, allowing anyone to view all transactions publicly – increasing transparency in financial markets and building trust among traders.
- Reduced risk of fraud: The decentralized nature of the blockchain makes it less vulnerable to fraud and tampering than a centralized system, reducing the risk of fraudulent activity and improving overall security in the financial market.
- Automation: Using smart contracts can automate specific processes, such as the execution of trades and the settlement of transactions. This can mitigate the risk of errors by centralized systems, decrease down-time, and improve the efficiency of the financial markets.
- Cost savings: Using a blockchain to maintain an order book can reduce the need for intermediaries, which can lower costs for traders.
In contrast to traditional methods, Gridex also files orders to its Ethereum order books to add extra liquidity perks.
Overall, Gridex’s Ethereum order books can provide a number of benefits that can help to improve the efficiency, transparency, and security of trading processes like no other Web2 or Web3 order books.
Traditional order books are often prone to problems such as lack of transparency, low liquidity, market manipulation, and slow trades. In contrast, thanks to blockchain technologies, Gridex’s Ethereum order book wipes away those issues, offering increased transparency, reduced risk of fraud, improved security, automation, and cost savings.
To learn more about Gridex and its capabilities, read the company’s whitepaper.