Why Coinsquad?

Coinsquad is dedicated to nuturing continuous engagement amongst our user base. Our paramount objective is to establish and maintain a secure environment for all investors within the Coinsquad ecosystem. To achieve this goal, we have implemented stringent KYC (Know Your Customer) procedures designed to mitigate risks associated with fraudulent activities on our platform. Our topmost priority is to ensure the confidence and peace of mind of our investors, assuring them that Coinsquad serves as a safe and reliable avenue for their cryptocurrency investment endeavors.

Comparison to Traditional Markets

To grasp the disparities between the Coinsquad DEX and conventional markets, it's essential to delve into the mechanics of the Coinsquad and contrast them with those of a typical exchange. This entails examining how the Automated Market Maker (AMM) model diverges from the conventional central limit order book system and the distinctions between permissionless and permissioned systems.

Order Book vs. Automated Market Maker (AMM)

Conventional markets typically operate using a central limit order book structure, wherein buyers and sellers submit orders at various price levels, and these orders are executed based on demand dynamics. Those acquainted with stock trading via brokerage firms are likely familiar with this order book system.

In contrast, the Coinsquad DEX employs an Automated Market Maker (AMM), also known as a Constant Function Market Maker, instead of an order book.

At its core, an AMM replaces the traditional buy and sell orders with a liquidity pool containing two assets, each valued relative to the other. As trades occur between these assets, their relative prices fluctuate, establishing new market rates for both. In this setup, traders interact directly with the liquidity pool rather than with specific orders from other participants. The merits and drawbacks of Automated Market Makers compared to traditional order book systems are subjects of ongoing research, with numerous parties actively investigating this area. Notable examples of research findings can be found on our dedicated research page.

Permissionless Systems

Another fundamental deviation from conventional markets is embodied in the permissionless and immutable architecture of Coinsquad DEX. These architectural choices draw inspiration from Ethereum's fundamental principles and reflect our unwavering dedication to the ideals of open access and immutability, which we deem essential for empowering a future where financial services are universally accessible without fear of discrimination or counterparty risk.

A permissionless design entails that the protocol's functionalities are fully open to public use, devoid of any capacity to selectively restrict access. Anyone can engage in swapping assets, providing liquidity, or establishing new markets at their discretion. This stands in stark contrast to traditional financial services, which typically impose access restrictions based on factors such as geographic location, wealth, or age.

Additionally, the protocol's immutability means it is not subject to upgrades or alterations. No entity possesses the ability to halt contracts, reverse trade executions, or modify the protocol's behavior in any manner. It's important to note that while Coinsquad Governance reserves the right (though not the obligation) to allocate a portion of swap fees from any pool to a designated address, this capability is transparent to all participants beforehand.