FUJAN CRYPTO REPORTS
Whitepaper
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Introduction
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Smart contracts are far too slow to execute the complex matching logic of order books on high-volume, centralized exchanges. In practice, this means that users cannot execute complex trades, and presents opportunities for arbitrage on stale orders
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Today, users who want to trade currencies across chains or against national currencies must use centralized exchanges
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Order matching is by far the most computationally expensive operation when running an exchange. By encapsulating this component in an off-chain service, we can reap enormous improvements in speed, and also support complex trades such as limit or market order
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Similarly, an off-chain engine can act as a coordinator of transactions across chains, enabling a straight forward approach to cross-chain exchange
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By committing orders on-chain as they are matched—with provable deterministic behavior—we can also retain the security benefits of traditional DEXs
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if a website takes payment in GAS and a user holds only ETH in their wallet, NEX will allow the user to convert some portion of their holdings and send it to the website, directly from their existing address
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To support such an ecosystem, we have developed a cross-chain browser extension that allows websites to communicate with user accounts and the NEX matching engine
Neon Exchange
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Off-chain Matching Engine
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Trusted Off-chain Matching
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propose the idea of provable fair off-chain matching
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Under this scheme, the off-chain matching engine follows a publicly specified deterministic algorithm
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By combining this knowledge with a public ledger of the order in which trades have been sent to the exchange and fulfilled on the blockchain, any user can verify that the exchange is operating fairly
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User Accounts
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NEX aims to bring a similar user experience to decentralized exchange by storing a user’s encrypted private key client-side in a user’s browser
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This preserves the security guarantees of a decentralized account model while allowing users to login into NEX through a traditional web form that asks for a username and password
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National Currencies
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NEX is solving this project through banking partnerships with companies around the world
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Through this network of partners, users will be able to buy cryptocurrencies directly using national currencies to store in their wallets and trade on the exchange
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Types of Orders
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Exchange API
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Because these transactions take place off-chain, the NEX API can handle tens of thousands of requests per second, in-line with popular centralized exchanges
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To submit an order to the matching engine, a client must make a JSON request that is signed with the private key associated with the address placing the order. This ensures that a user cannot submit a trade on an address they do not control
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Before attempting to match an order, the engine will also verify that the user has granted NEX’s smart contract enough of the asset such that the order can successfully be executed
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Fee Structure
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Implementation
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The NEX off-chain matching engine will be built in Elixir, a functional programming language designed to build scalable, distributed, and fault-tolerant application
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Elixir builds on top of Erlang, a language originally intended for development of telecommunication systems, which is now used by modern web developers to manage the challenges of dealing with high availability
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Smart Contract for Token Exchange
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Trade Method Signature
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The NEX exchange smart contract (SC) accepts two parameters: a string indicating the operation to be performed and a bytearray containing serialized data for usage in the method
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To ensure that no third-party can execute a fraudulent trade between users, the trade method of the exchange smart contract will only accept orders signed by a private key held by the matching engine
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Withdrawal
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To retrieve tokens held for an active trade, a user can submit a cancel order to the NEX matching engine, which will then submit an immediate withdraw order to the exchange SC, transferring tokens back to the user
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However, to enhance user trust in NEX, the smart contract also supports a slower direct withdrawal that requires no communication with the off-chain matching engine
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his second withdrawal process ensures that (1) users can withdraw active trade funds in the event of a broken or compromised matching engine (2) the matching engine has enough time to notice and cancel orders invalidated through any direct withdrawal of funds
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Users can always retrieve funds immediately by submitting an order cancellation to the matching engine, so we expect that the slower direct withdrawal method will not often be used
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On-Chain Settlement
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Cross-chain Exchange
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Suppose user A wants to trade 100 NEO for 5 ETH, and user B wants to trade 5 ETH for100 NEO. Each user places a limit order on NEX, moving their funds into smart contract vaults on NEO and Ethereum respectively. When the matching engine matches the trade, it sends a signal to the vaults on each chain. On Ethereum the smart contract moves 5 ETH into A’s address, while on NEO the smart contract moves 100 NEO into B’s address
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Withdrawal for UTXO-based Assets
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NEX Web Extension
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Asset Management
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Extension Web API
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User Identity: Websites can leverage the web extension to pull and populate relevant user information into a page
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Transaction Initiation: Websites can initiate transactions through API calls to the web extension, resulting in a new extension window pre-filled with the relevant transaction data
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Smart Contract Invocation: This API allows such websites to initiate a call to a smart contract in a new transaction window
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Security
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The NEX extension has undergone a full security audit by the Cure53 team
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The extension also integrates security features to prevent spoofing, such as a secret color and code word presented to the user in each popup window
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the NEX extension actively protects users from known scammers by forcing a redirect when it encounters a known malicious website
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Incorporation
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NEX is a limited company registered in Vaduz, Liechtenstein ("Neon Exchange AG"). We are currently cooperating with financial authorities in pursuit of acquiring an Organized Trading Facility(OTF) license
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NEX Token
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Calculating Fees
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Total NEX fees are calculated by simply computing the fees taken for each asset on the exchange
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Claiming Fees Via Staking NEX Tokens
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Claim Example
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Token Sale
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Held in April 2018, Half the tokens will sold to the public so 25 million
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Roadmap
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Team
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Fabio Cesar Canesin – Co-Founder
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Co-Founder of City of Zion - Current
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Research Engineer for Schlumberger – Current
Ethan Fast – Co-Founder
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Co-Founder of City of Zion – Current
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CS PhD Candidate at Stanford – Current
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Visting Researcher for Microsoft – 3 months
Luciano Engel – Co-Founder
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Co-Founder of City of Zion – Current
Thomas Saunders – Co-Founder
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Co-Founder of City of Zion – Current
Nathaniel Walpole – Designer
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E-commerce Digital Designer for Cotswold Outdoor – 2 years 7 months
David Schwartz - Developer
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Member of City of Zion – Current
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Software Engineer for Leaf Group – 1 year 3 months
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Analyst for Lockheed Martin – 1 year 5 months
Evgeny Boxer – Developer
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Software Engineer for Wix.com – 2 years
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Software Engineer for AOL – 3 years
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Software Engineer for Flextronics – 9 months
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System Administrator for Israel Defense Forces – 2 years 11 months
Carla Paiva – Marketing and Public Relations
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Intern and Technical Advisor for Petrobras – 2 years
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Intern for Banco do Brasil – 1 year
Clare Saunders – Marketing and Communications
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Marketing Coordinator for Buffalo Wild Wings – 2 years 7 months
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Best Buy Communication Intern – 6 months
Muzzammil Zaveri – Advisor
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Manager, Strategic Initiatives for Tencent – 2 years
Da Hongfei – Advisor
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Founder & CEO of Onchain and NEO – current
Erik Zhang – advisor
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CTO for Onchain
Partners & Backers
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Brown Rudnick LLP
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Nägele Rechtsanwälte GmbH
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Ernst & Young AG
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IdentityMind Global
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GN Treuhand Establishment
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Red Pulse
Articles
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https://oracletimes.com/neo-and-neonexchange-nex-to-be-represented-at-the-european-parliament/
https://neonewstoday.com/general/neo-news-week-in-review-april-30th-may-6th/
https://neonewstoday.com/general/smart-economy-expo-present-to-european-parliament/
Videos
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https://www.youtube.com/watch?v=3cpMV8ZZf-g
https://www.youtube.com/watch?v=IxZDH1nZg2M
https://www.youtube.com/watch?v=0UXT6FClFE4
https://www.youtube.com/watch?v=g_sWdyAPXfI
https://www.youtube.com/watch?v=-wJv6ZUQWIg
https://www.youtube.com/watch?v=FZVpUuKD0ms
CoinCheckUp
Conclusion
I would give NEX a C+ rating. I think that NEX has provided quite a few great features that the other current DEX exchanges do not have. I like the idea of a chrome extension, I like the idea of doing it off-chain to make the transactions faster, and I like how secure it is too. However I feel like there is going to be a lot of competition in this space, now yes competition is good, but yet again we have barely scratched the surface of mainstream so only exchanges that are simple and easy to use will be successful. Personally I feel like investing in an exchange isn’t worth it, but that doesn’t mean they don’t have value. Clearly this company is very heavily linked to NEO meaning they will be getting a lot of help and could provide a decent exchange for the NEO community. Now this project to me is in similar terms of TNC where yes there could be value to it, but I still personally feel like there are stronger projects to hold. Unless NEX because a very widely known and popular exchange which will be hard to do, personally I feel like there are better investments out there. Now can this company 100x, yes there is a potential, however does this company excite me like some of the others, no not really. This is only my opinion, but I think I would personally need to see a lot more than a connection to NEO to prove that this project will be a rare gem in the DEX world.
