Here we have gathered some of the most frequently asked questions.
Are you an exchange operator?
No. The Beacon Exchange Protocol provides a means for trades (of digital assets) to be conducted online without the use of an exchange operator because there is no need for an operator to host a matching engine or list currencies (currency pairs) when participants are able to list and match themselves.
Why another decentralized exchange?
Most decentralized exchanges run orders through a centralized off-chain matching engine. Of the remaining decentralized exchanges, the matching logic is entirely on-chain. Both architectures leave orders vulnerable to front-running.
Instead of matching orders for marketplace participants, the Beacon Exchange Protocol provides a means for participants to discover orders, negotiate with each other, and reach agreements that may be enforced on-chain.
Why is front-running a problem?
At minimum, front-running increases implicit costs without providing additional value to market participants in return. If you'd like to read more about the research, you can get a glimpse of it here).
Isn't the centralized exchange my fiduciary?
No. A centralized exchange profits from the order flow you generate, regardless of your specific outcome, whether they are charging the fees directly to your account or some other interested party.
Don't centralized exchanges provide the best prices?
No. If a centralized exchange were to promise you the best price (exchange rate), the centralized exchange would send or forward your order to whichever exchange had the best price (exchange rate). As it currently operates, if you see a better price at a different exchange, you would have to move your money from the exchange you have it in to the exchange you want to trade on and hope that the price hasn't moved against you by the time that process is finished.
Is the Beacon Smart Contract a third party to trades?
No. The agency in each trade rests with the parties to the trades. The Beacon Smart Contract is open-source, so you can see that it doesn't act as a toll booth to siphon off any type of service fee.
How far along are you in this project?
After a year of active discussions, we have released the first draft of the white paper and chosen the underlying technologies we would like to use for the reference implementation. We are currently adding the features that we would need to the Vyper smart contract language before we can use Vyper to program the Beacon Smart Contract. In the meantime, we have moved forward with implementing the first version of the smart contract in Solidity. We have also begun work on the web application/UI. (This answer last updated on 2019-02-12.)
How do you anticipate Beacon Exchange will impact the ecosystem?
While we don't believe that Beacon Exchange will solve all problems for all people, we do believe that people who understand the benefits of decentralization will come to trust themselves (and utilize Beacon Exchange for their cryptocurrency trading needs) more than they trust other exchanges. There will always be a place in the ecosystem for centralized systems that offer faster or more convenient services. However, we believe these service providers should attract and earn your business by providing great service, not retain your business because you have no truly decentralized alternative(s). This should lower the baseline cost of doing business within the ecosystem.
What problems are you NOT solving?
- We're NOT trying to solve every blockchain or cryptocurrency related problem.
- We're NOT trying to make Beacon Exchange faster than a centralized exchange.
- We're NOT trying to improve the speed of the underlying ("parent") blockchain(s).
- We're NOT trying to attract participants who feel they would be better served by a centralized, hybrid, or completely on-chain exchange mechanism
How do you plan on monetizing Beacon Exchange?
We're not. If we structured Beacon Exchange in a way that allows us (or someone else) to set up a toll booth and collect fees, it wouldn't be very decentralized. That's just how we feel.
If paid services were to be offered, they would be separate and opt-in.
This is why we are asking for support from the community in the form of donations as we focus on acquiring non-dilutive funding.