Switcheo Network Review - a Fundamental Analysis
Switcheo is a non-custodian exchange, facilitating peer-to-peer transfers of digital assets - or a decentralized cryptocurrency exchange (DEX). The first version of Switcheo launched in April 2018, accommodating the NEO blockchain, meaning you could only trade NEP5 tokens at first. Besides that, it was missing a lot of the features it currently has. This review will show that a lot has changed in just over a year’s time. From added Ledger support to integration of more blockchains and featuring Atomic Swaps: Switcheo Network has steadily become a very smooth and complete exchange that can be used by everyone, from everywhere.
Switcheo is currently integrated with three blockchains: NEO, Ethereum and EOS - supporting ERC-20, NEP-5 and EOS tokens. The cryptocurrency trading platform also offers Over-The-Counter services and has Atomic Swap markets which allow traders to do cross-chain trades without requiring a trusted third party.
As a DEX, anyone can use Switcheo Exchange without going through a KYC (Know-Your-Customer) process. The exchange platform makes peer-to-peer trading simple and is already regularly used by more than 30.000 traders from around the world.
The aim of this review is to take a look at how the project is funded, structured and - most importantly - what its features are and how good it all works. In doing so, we will focus on past, current and future aspecs of Switcheo.
TOKENOMICS AND FUNDING
Project whitepaper V1.0 - V2.0 will soon be released
Token type: NEP5
Total supply: 1000.000.000 tokens
Public sale SWTH token price = $0.016
The Switcheo ICO crowd sale started on 16th March 2018 and was tradable soon after on their own Switcheo exchange.
The Switcheo token (SWTH) was launched alongside Switcheo Exchange, as a mechanism for paying commissions (trading fees) on trades matched by Switcheo. As stated in the whitepaper, paying trading fees using SWTH allows traders to trade with a discount. Initially, SWTH used as a discounted trading fee would be burned and, currently, that is still the case.
By the end of June 2019, a total of 7.5 million tokens were used to pay as fees - and thus burned, representing a 2,2% annualized deflation in token supply.
In June 2019, the Switcheo team announced the details of its upcoming standalone blockchain. The main new design features for Switcheo Chain include a token staking model to distribute revenue and a Tendermint consensus algorithm. Tendermint is described as a “Byzantine Fault Tolerance-based Proof of Stake” consensus mechanism. The tokenomics of Switcheo will change in the near future when Switcheo Chain will launch and the current use of the SWTH token will not be in full effect anymore.
Burning - at least in its current form - will not exist anymore once Switcheo Chain launches. One way the Switcheo token will continue to deflate is by using Swticheo tokens as a payment for “automated listing”. Token owners will be able to set up markets in a permission-less way through the use of Switcheo tokens in the future. By burning Switcheo tokens as a listing fee, any token can be listed automatically. The minimum requirements for the liquidity pool and the listing fee are not disclosed yet.
According to the Switcheo website, the core team currently exists of 16 people. All of the regular roles are filled throughout the team; leading positions, 5 PR/marketing employees, 4 developers and 2 designers. All LinkedIn profiles are accessible from the website, making it transparant to see what everyone’s experience is and what they’ve worked on before creating or joining Switcheo Network.
A selection of the team members and employees that have been with Switcheo from the start:
CEO / Blockchain Developer / Co-Founder
Ivan has a Bachelor of Engineering from the National University of Singapore. He is a software engineer with previous experience as a Chief Technical Officer for several companies and as a Director and Co-Founder of Payboy. Payboy is ‘the leading HR management software suite for Singapore. Payboy assists companies in being super efficient in their routine HR communications’ .
COO / Frontend Developer / Co-Founder
Henry has a Bachelor of Engineering from the National University of Singapore. Besides his previous experience as a Software Engineer for two companies, he has also held the position of Chief Technology Officer for Payboy.
CCO / Chief Commercial Officer / Co-Founder
Jack is a User Experience/User Interface Developer with an interest in data-driven analytics through AI, deep learning and blockchain technologies. Besides that, he has experience working for several companies as a Creative Designer.
Sng Ping Chiang
Sng Ping Chiang has a Bachelor of Engineering from the National University of Singapore. Before his current job as a Developer for Switcheo, his previous experience includes that as a Software Engineer and Developer for three other companies.
Roger is an experienced Executive with a demonstrated history of working in the venture capital, blockchain and information technology industries. Skilled in Venture investment, Blockchain technologies, Managed Services, Business Development, Entrepreneurship and Mobile Devices.
His current and previous experience includes being a founding partner of NEO Global Capital (NGC) and working as an advisor of different blockchain companies, e.g. Tomochain, Bluzelle, Ochain, nOS, Chromia and MultiVAC.
Yingyu has a strong legal background and is giving Switcheo legal advice when necessary.
As the only female noted by The Legal 500 AP as a leading individual for Tech, Media & Telco (TMT) Law from 2016 to 2018 and Chambers & Partners for Intellectual Property (IP) Litigation 2017, Ying aims to deliver commercially viable and legally sound solutions for clients in a range of disputes and non-contentious matters, with a strong focus in IP and technology issues. She was also a finalist for the Asian Legal Business “Woman Lawyer of the Year” award in 2017. In 2018, Ying was named one of the world’s top ten cryptocurrency experts in the world by The Cryptocurrency Magazine, which received 2,000 nominations.
Christel is well known for her expertise in Social Media and Community Marketing. She is the co-founder and Chief Commercial Officer of Bolt. She is also an advisor for Zilliqa. Previous job experiences are, amongst others, as a Regional Social Business Lead for Samsung Asia and as a Social Media Strategist and Global Social Manager for the Havas Media Group.
Instead of the usual roadmap we see with many blockchain projects, Switcheo has a quarterly review of what has been accomplished and what is planned for the next quarter. As we are currently nearing the end of Q3 2019, the Q3/Q4 review has not been posted yet. For the Q2/Q3 review, take a look at the roadmap article published on July 3rd 2019 here.
Some of the more prominent milestones that are planned for Q3 2019, but have not been released yet, are as follows:
Switcheo Chain Beta
Most of Switcheo’s engineering time is now focused on Switcheo Chain. The launch of the beta had been pushed back slightly, but the team hopes they are able to share the beta soon so that their to-be-validators can begin testing. In addition, work on their custom block explorer for viewing side-chain transactions has also begun.
As a lot has changed - and will change - for Switcheo, there is a need for a new whitepaper. Switcheo is working on an updated whitepaper outlining all the features Switcheo Chain will have. The motivations behind this specialised trading blockchain and a more in-depth explanation of how it works will be revealed in the revised whitepaper.
Switcheo promised to release open-source bots, and as such they will be releasing an extremely modular bot built specifically for Switcheo Exchange soon. It can be fully customized to various custom strategies and inventory configurations. Switcheo also has the next blockchain integration and convenience features in the pipeline.
Switcheo has kickstarted a major marketing & awareness endeavour which will be launched this quarter. More details will be revealed at a later date.
A referral program will be launched for Switcheo Exchange. There will be two phases — and the first phase (Switcheo Account only) had a target launch date of late July / early August. We will have to stay tuned to find out how everyone can earn rewards and win prizes for sharing about Switcheo.
There are several kinds of decentralized exchanges, each with varying degree of decentralization. Switcheo launched as a decentralized “wallet” exchange where traders remain the custodian of their own assets throughout the entire trading process, also known as a non-custodial exchange.
Smart contracts are used for all trades on Switcheo - and thus all tranfers of funds. In contrast with centralized exchanges such as KuCoin or Binance, Switcheo has no central wallet where all user funds are stored. This makes Switcheo - and other DEX - a lot safer to use for traders, as the exchange is immune to the general exchange hacks we have seen with some centralized exchanges. This makes security one of the main fundamental highlights of Switcheo Exchange.
Switcheo is also very user-friendly. Whilst first generation DEX - e.g. EtherDelta - are well known for their lack of an intuitive and smooth user interface and user experience, Switcheo has a design that’s very clear and easy to understand.
No matter what way you’re accessing the exchange, either by account, hardware wallet or other external wallets, using Switcheo is a breeze.
Let’s dive a bit deeper in the fundamental features of Switcheo, starting with the many ways traders can log in to the exchange.
Crypto Wallet Log In
One of the conveniences that comes with trading on a DEX is that no KYC (Know Your Customer) process is needed to start trading. There are many ways to log in to Switcheo and start trading, all of which only one requires going through a KYC process.
Traders can log in with both the Trezor and Ledger hardware wallets. At MyCryptoSpirit, we have all used this feature at some point when trading on Switcheo. In our opinion, it is a very intuitive and smooth experience using Ledger log in on the exchange.
The team introduced Switcheo Account, a simple email and password login system, similar to that of a centralized exchange. Without requiring a separate blockchain wallet or software, users can trade on all supported chains by simply signing up with their email and password, reducing friction for new users.
When you send funds to addresses in Switcheo Account, you are sending funds to wallets you fully own, which are tied to your Switcheo Account.
When you create a Switcheo Account, a backup phrase (also known as mnemonic phrase) is generated at random and multiple blockchain wallets are created and tied to your account. With the mnemonic phrase, it is possible to generate the private keys to multiple addresses across different blockchains. Switcheo will never have access to your account.
2FA via Google Authenticator and email verification are also available as additional security measures.
External Crypto Wallets
There are several option for wallets of the NEO, Ethereum and EOS blockchains to connect with Switcheo Exchange. A short summary of the seperate blockchains and wallets:
O3 - a cryptocurrency wallet built specifically for the NEO smart economy.
JSON file - trade tokens on the NEO blockchain through an exported NEO wallet file.
Encrypted Key - trade tokens using the encrypted key and passphrase of your existing NEO account.
Private Key - trade tokens using the private key of your existing NEO account.
MetaMask - a browser extension wallet.
Private Key - trade tokens using the private key of your existing Ethereum account.
Scatter - an EOS wallet.
Private Key - trade tokens using the private key of your existing EOS account.
Documentation / Blog
This may not usually be considered as a fundamental feature of a blockchain project, but it is worth mentioning that Switcheo does a great job at providing documentation that explains the most important aspects of the Switcheo Exchange.
An extremely useful source of documentation is the Intercom Help section; it has great information on a range of specific Switcheo features: e.g. security; how to get started and step-by-step guides on how to use the Switcheo features.
Another useful source of documentation is the blog, which has entries that are called Switcheo Discovery, discussing a broad range of Switcheo and blockchain aspects, including:
an Ultimate Beginner’s Guide to Switcheo;
explaining How Switcheo Account Actually Works;
an introduction to How Switcheo Exchange Works; and
explaining what Hyperdeflationary Tokens are.
If you want to know more about Switcheo, what they do and how it all works, be sure to take a look at documentation sources as mentioned above.
Atomic Swap Markets
Atomic Swap is a feature on Switcheo Exchange which allows users to trade across two different blockchains (e.g. cross-chain between ETH and NEO). Switcheo’s implementation of cross-chain trading through Atomic Swaps is particularly noteworthy as these trades are simple to execute but do not require a trusted 3rd-party at all.
On July 5th 2019 Switcheo released an article explaining in detail how the Atomic Swap markets work on Switcheo Exchange.
OTC Trading Platform
Switcheo OTC is a crypto-to-crypto over-the-counter trading platform that leverages on our existing trustless smart contracts (currently on Ethereum and NEO), by allowing users to execute peer-to-peer trades with zero counterparty risk and super low fees.
Switcheo created this article to explain the OTC market, including a step-by-step guide on how to use it.
On August 1st 2019, Switcheo announced they are among the first members to be partnering with NEO under the NEO EcoBoost program. As one of the exchange partners, the aim is to support token projects built on NEO to further contribute to the sustainability of the NEO ecosystem by having priority in their listing processes.
Switcheo Network position themselves as The Preferred Exchange. Their mission is to enable trustless transfers across blockchains in a practical manner, by delivering a world-class trading experience without compromising on trustlessness.
In our opinion, they are well on their way in succeeding with that. Switcheo is continuously evolving; adding new features that make trading on the exchange even more convenient than it already is. The user experience is really outstanding, especially if we are to compare it to other decentralized exchanges in the cryptocurrency market. It is designed very well and feels intuitive to use; the interface is smooth, clear and uncluttered.
Considering the volumes, trading pairs and features of centralized exchanges, Switcheo is not the general preferred exchange yet. But as many believe that decentralized exchanges are the future of cryptocurrency trading, they might just succeed in becoming one of the most used exchanges overall. Especially if they keep up building and expanding on the exchange’s aspects as they are currently doing.
We currently consider Switcheo as the number one go-to DEX, with lots of future potential. At MyCryptoSpirit, we are very curious to see how Switcheo will further develop and, as such, we will be sure to follow the Switcheo updates closely.