Exchange Union is a “decentralized network” that connects individual digital asset exchanges from around the world. The team is on a mission to solve one of crypto’s most prominent issues – illiquidity.
Most investors have experienced this first-hand: You find a digital asset you like and want to invest in. However, the coin is only available on a handful of exchanges. On top of that, you can only use Bitcoin or Ethereum to trade for it. This leads to a sometimes hour-long process filled with multiple manual transfers over at least two exchanges.
And, the illiquidity problem means there are numerous trading pairs that aren’t even available yet.
Exchange Union connects the order books from different exchanges to bring you instant, trustless trades for a better price and overall improved trading experience.
In this Exchange Union guide, we’re going to cover:How does Exchange Union work?
The Exchange Union team describes the platform as a “meta-exchange” because they’re building it as a layer on top of the existing centralized exchanges. It’s effectively an exchange of exchanges. To do this, the project utilizes popular second-layer scaling solutions like:Payment channels Atomic swaps Payment Channels
Payment channels provide an instant way to transfer digital assets off-chain between two parties. The transactions are only recorded on the blockchain when the payment channel is first opened and when it’s closed. You can think of it as updating balances on both ends of the channel for each transfer. Once you close the payment channel, both parties get their respective final balances.
Payment channels are trustless – any disputes are resolved automatically through cryptography. And, transfers using them are secured by the underlying blockchain making them as reliable as exchanges on the blockchain itself.
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