What is Cardax and how can you get started with it?

As with any other currency, cryptocurrency trading is also based on an exchange of coins/tokens. These exchanges, in essence, are online trading platforms for buying and selling different kinds of cryptocurrencies. In general, all the platforms are secure and offer various trading options. It is highly efficient and time-saving and provides excellent returns with every exchange.

Ideally, crypto exchanges are divided into three categories:

Centralized Exchange

Exchange platforms where a private financial institution monitors transactions. These platforms usually abide by the AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations. These platforms might not provide absolute privacy to their customers. Such platforms include Kraken, Binance, Bitfinex, Coinbase, Remitano, etc.

Decentralized Exchange

As the name suggests, these exchange platforms are not monitored by a central private entity. They are as independent as the cryptocurrencies being traded on them. This is facilitated by blockchain technology. Famous examples include Bancor Protocol, EtherDelta, Kyber Network, AirSwap, WavesDEX, etc.

Hybrid Exchange

This exchange includes features both from the centralized and decentralized exchanges. The benefits of both worlds are combined in this exchange, like the privacy offered by decentralized exchange and the liquidity provided by the centralized exchange. Examples of this unique exchange include Eidoo, Stoxum, and Qurrex.

In this blog, we will primarily focus on a decentralized exchange, specifically Cardax, one of the largest decentralized exchanges on Cardano crypto.

What is Cardano blockchain?

When seen in terms of market capitalization, Cardano is considered to be one of the largest cryptocurrencies. It is designed as a scalable, sustainable, and flexible platform that supports smart contracts. It allows a wide range of games, new crypto tokens, decentralized finance applications, etc. It is a public blockchain platform that utilizes the Proof-of-Stake (PoS) consensus algorithm. The Cardano token is named ADA in loving memory of Ada Lovelace, developer of several visionary concepts.

Cardano received its name from Gerolamo Cardano, a relevant figure in astronomy, physics, chemistry, medicine, mathematics, etc. 

What is a Decentralised Exchange (DEX)?

As mentioned above, decentralized exchanges (DEXes) do not have one private entity regulating all the transactions. It is highly secured due to its blockchain technology and provides crypto traders the ease of trading across digital platforms that are safeguarded from cyber attacks. DEXes do not store customer information like location and only serve as a matching and routing platform for efficient transactions across the network.

No intermediaries are involved, and fiat currencies like the US Dollar cannot be traded through DEXes. Popular DEXes are PancakeSwap, SushiSwap, BurgerSwap, Uniswap, etc.

What is Cardax?

Cardax is a popular decentralized exchange in Cardano. It facilitates the trading of ADA for native Cardano Tokens. It combines the best features of the AMM (Automated Market Maker) model and the Order book model. Hence, this exchange can facilitate both liquid and illiquid pairs. The combined model was named EAMM by Cardano. AMM model is best suited to support illiquid pairs, while the Order book model looks after the liquid pairs.

How does Cardax work?

Cardax utilizes a unique algorithm, the Streaming Merge algorithm, developed by their development team. One major issue in the Cardano blockchain is its concurrency issue. This algorithm was created as a solution to this issue. The working of Cardax is centered around this algorithm. As the first step, the users need to book a slot in a given list of slots. They have then designated a lane from where they can place their orders.

The algorithm then sorts the orders based on the time it was initiated. The algorithm randomly sorts simultaneous orders. 

What are some of the key features of Cardax?

• It supports any native Cardano token and is primarily targeted at boosting the Cardano ecosystem.
• These transactions can be directly facilitated from Candano’s Yorio wallet.
• Once the DEX hits the mainnet, it will facilitate governance using Cardax DAO (Decentralized Autonomous Organization).