Hey guys :) I’m back with another comprehensive Q&A piece, this time for the up and coming decentralized exchange (DEX) for the decentralized finance (DeFi) sphere – Serum (SRM).
Serum is a DEX created from the same team that brought us the popular cryptocurrency derivatives exchange, FTX.
With the launch of Serum, the team hopes to test the boundaries of existing DEXes by providing a completely on-chain, fast & efficient, and permissionless cryptocurrency DEX.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:
- What is Project Serum?
- Who and When Created Serum?
- What is $SRM Token Used For?
- What is Serum DEX?
- How is Serum Governed?
- What else can be built on Serum?
- Where to Store $SRM Token?
- Where you Buy & Sell $SRM
1. What is Project Serum?
Serum website homepage
Project Serum is the world’s first completely on-chain decentralized cryptocurrency exchange with trustless cross-chain trading. The Serum DEX provides its customers with fast and efficient and permissionless trading between digital assets across chains.
On Sereum, traders can trustlessly exchange assets between chains (ie. BTC for ETH or any ERC-20 token and vice versa).
Project Serum aims to deliver a more intuitive, full limit order book dex with full liquidity and crosschain interoperability. It aims to solve the fundamental issues apparent in existing DeFi – slowness, high pricing, and cross-chain interoperability.
In doing this, Project Serum has the potential to reshape the current DeFi landscape.
Most DeFi protocols bottom out in a centralized oracle – often in the most crucial step, Serum doesn't.
BTC isn’t on Ethereum, so how can a smart contract know or impact its transfers? Serum enables you to trustlessly exchange assets between chains with no centralized parties involved.
A solution to the onchain stablecoin dilemma:
A stablecoin that is always worth a dollar but also doesn’t rely on a bank account not getting shut down. Serum’s SPL and ERC-20 USD stablecoin are decentralized stablecoins with no single points of failure.
Full Limit Orderbooks:
Serum supports the best technology from centralized exchanges; no need to take a step back with automated market making. Serum’s orderbooks are decentralized, automated, and entirely limit-order based.
Serum makes trades that don't cost a dollar to place or take minutes to clear. Serum is fast and efficient.
2. Who and When Created Serum?
Serum founder, Sam Bankman-Fried
Serum was founded by Sam Bankman-Fried and the team at FTX Exchange in August 2020.
Sam is the inspiring entrepreneur and active DeFi community member who founded the FTX cryptocurrency derivatives exchange in 2019. He’s also the CEO and founder of Alameda Research, a top cryptocurrency liquidity provider, and was a leading trader at Jane Street.
While serving as CEO at FTX Exchange, Sam and other team members of the FTX Exchange began brainstorming a DeFi derivatives exchange protocol to build. They knew that such a protocol couldn’t be built on Ethereum just yet, given the network-intensive features they wanted it to have.
They looked at multiple different blockchains and eventually chose Solana (SOL), a high-performance blockchain designed with efficiency in mind.
While creating Serum, Sam and his team partnered with multiple crypto industry leaders including the founders of Multicoin Capital, TomoChain, Compound, Kyber Network, and many more.
The Serum project also took on noteworthy advisors including Robert Leshner - Founder of Compound, Calvin Liu - Strategy Lead of Compound, Long Vuong - Founder and CEO of TomoChain, and 8 other talented individuals.
3. What is $SRM Token Used For?
Serum (SRM) token logo
Serum $SRM is the native cryptocurrency of the Serum DEX and is the backbone of the Serum ecosystem. $SRM is natively on the Solana blockchain as an SPL token and is cross-listed on Ethereum as an ERC-20 token.
$SRM Token Utility:
- Reduce fees
- Staking rewards
- Token burns
The SRM token can be used to pay for fees on the Serum platform. Also, by simply holding SRM, traders benefit from as much as a 50% discount on all trading costs. It's a similar technique Binance used for its BNB token.
Each staking node requires at least 10,000,000 SRM, and each node must have at least 1 MegaSerum (MSRM) in it as well. Serum nodes perform important on-chain actions such as supplying blockchain histories for cross-chain settlement validation.
Serum node operators receive SRM staking rewards based on their node’s performance. Users who don’t have enough SRM tokens to host their own node may stake towards another node to benefit from a fraction of the rewards.
SRM token holders can participate in buy and burns for 100% of net fees. As of October 12, 2020, a total of 233,748 SRM have been burned (removed from circulation forever).
SRM is anticipated to have specialized on-chain governance. SRM token holders will be responsible for setting some important parameters (e.g. fees) and will have governance overall net revenue generated by the platform. Serum revenue can be utilized as SRM stakers vote, include via yield, buy/burns, grants, or other usages.
Serum (SRM) Stats
The total capped supply of $SRM is 10,000,000,000 (10 Billion) and 90% of all SRM tokens are designed for long-term hold or lock-ups. This is to ensure that the team is here for the long-term.
- 20% Team and Advisors
- 22% Project Contributors
- 4% Locked Seed and Auction Purchasers
- 27% Partner and Collaborator Fund
- 27% Ecosystem Incentive Fund
$SRM token distribution (Source)
4. What is Serum DEX?
Serum DEX is a decentralized exchange protocol that facilitates fast, efficient, and permissionless trading between digital assets across chains. It can be utilized by developers to create and deploy next-generation DEXes.
As of October 15, 2020, the following Serum DEX relayers have been built:
- Bonfida Serum DEX: https://bonfida.com/dex
- Cryptocurrencies.Ai DEX: https://dex.cryptocurrencies.ai/
- Serum Today: https://serum.today
- Serum Pro: https://serumpro.org
- Serum Folkvang.io: https://serum-mirror.folkvang.io
- Project Serum DEX: https://dex.projectserum.com
- SerumStake DEX: https://dex.serumstakers.com
- Tech.Ed Training: https://serum.techedtraining.com/
- Santosha Exchange: https://exchange.santosha.digital
- Pangea DEX https://pangeadex.com/
- SerumDex.Exchange: https://serumdex.exchange
- SolFlare DEX: https://dex.solflare.com
- Advance Finance DEX: https://advance.finance
- Viralic DEX: https://dex.viralic.io
- Illuminati Finance: http://illuminati.finance/serum
- Ourord DEX: https://dex.ourord.com
- BallsDeep DEX: https://serumdex.ballsdeep.me
- TradeOnSerum DEX: https://www.tradeonserum.com/
- Coin98: https://coin98.app
Out of all the DEXes listed above, SerumDex.Exchange appears to be one of the best relayers with the most liquidity and token pairs.
Important Serum DEX Features:
- A decentralized automated full limit order book. Traders have full control over their orders.
- Full Ethereum and Solana integration for enabling the trading of ETH and ERC-20 tokens as well as SOL and SPL tokens.
- Physically settled cross-chain contracts that enable margin trading in DeFi on synthetic assets.
- Cross-chain swaps, allowing users to trustlessly exchange assets between chains.
5. How is Serum Governed?
Serum’s native cryptocurrency, $SRM enables its holders to participate in the protocol’s on-chain governance system, with nodes, staking, and voting at its core.
Serum nodes perform important on-chain actions such as:
- Performing various well-defined functions to optimize Serum’s efficiency
- Submitting blockchain histories and challenges for cross-chain swaps
- Potentially managing the Serum insurance fund
Anyone can start a Serum node by staking a minimum of 10,000,000 SRM and 1 MegaSerum (MSRM). Users can also choose to stake a lesser amount of any size to someone else’s node to participate in the governance system and earn SRM rewards.
Moreover, nodes have very strict voting procedures on Serum:
For instance, a node may propose a rules change (e.g. fee changes) and doing so costs 50,000 SRM, which is deducted from the Node’s overall asset pool. If the rules change passes, that 50,000 SRM is returned; if not, it is burned. In order for a proposal to pass, it must receive a minimum of 60% of the world’s total staked SRM.
Serum Node Rewards
- Node leaders receive 15% of the node’s total reward, with the other 85% being split proportionally.
- Each node receives a base of 2% APY per year on its holdings.
- Each node receives another 0% - 13% per year based on its performance.
- Each node will also potentially receive rewards for their success in specific challenges and duties.
6. What else can be built on Serum?
In addition to building permissionless, fast & efficient, cross-chain DEXes, the Serum protocol can also be used to build contracts or to introduce assets like SerumBTC or SerumUSD.
Serum enables the creation of physically settled cross-chain contracts to easily open margin trading positions in DeFi synthetic assets.
This is Serum’s synthetic version of BTC. Serum hosts both SPL and ERC-20 tokenization of BTC.
This is Serum’s SPL and ERC-20 USD stablecoin, pegged 1:1 with the US dollar.
In addition to the Serum products mentioned above, other proposed project ideas for Serum include:
- AMM Bots using Pools
- SushiSwap on Solana
- Messaging Application
- Yield Farming
- Serum Oracle
- Token Minter Panel
- SPL Name Service
- Cross-Chain Bridges
- Native MetaMask Integration
Developers willing to build-out the above products and applications can apply for Serum grants and get in contact with ecoserum.dev to help their project flourish and succeed.
7. Where to Store $SRM Token?
Serum (SRM) is an SPL token residing on top of the high-performance Solana blockchain, rather than the public Ethereum blockchain. That said, you can store SRM in any Solana blockchain supported wallet.
However, the best wallets for storing SRM are non-custodial Web3 wallets that provide seamless access to decentralized applications, like Serum. That said, DeFi wallets are often the best for storing SRM.
The Sollet.io wallet is the official wallet developed by Project Serum. It’s a non-custodial web wallet that can be used to send and receive $SRM, $SOL and any $SPL Token.
8. Where you Buy & Sell $SRM
Serum (SRM) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade SRM is through centralized or decentralized cryptocurrency exchanges.
You can buy SRM with cryptocurrency or fiat currency at the following top exchanges. In most cases, you will be able to buy SRM with BTC, ETH, or stablecoins.
- Serum DEX - USDT, USDC
- Uniswap - WETH
- Binance - BTC, USDT, BUSD, BNB, BIDR,
- OKEx - BTC, USDT
- Balancer - WETH, SWAP
In addition to the exchanges listed above, Serum (SRM) is also traded on a wide variety of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.
Hope you enjoyed that read :) Let me know if I have missed something in the comments.