Using Monero Tunnels for swaps between two transparent blockchains
Hey everyone, we are pleased to announce that we have now implemented Monero Tunnels or 'bridges' between any two transparent blockchains on Trocador.app.
We are still evaluating the advantages / disadvantages for users and for the Monero community / network
In case someone has funds on a transparent blockchain like Bitcoin, Bitcoin Cash, etc, and wants to switch to another transparent blockchain like Litecoin (without MW), Ethereum etc, Trocador.app calculates the price of the exchange by channeling funds over Monero between two different exchanges, helping to anonymize wallets.
As an example, it works like this:
- User wants to exchange 5 BCH for LTC and generate fees in Trocador.app;
- Trocador calculates direct swap prices between BCH -> LTC on all exchanges, but also calculates a tunnel of BCH -> XMR -> LTC, but always using two different exchanges with the best prices, and offers all rates on the same screen;
- User chooses Monero Tunnel and provides his LTC address, then clicks Confirm Exchange;
- Trocador generates two transactions, one BCH -> XMR transaction via 'exchange 1' and another XMR -> LTC transaction via 'exchange 2';
- User pays 'exchange 1' using his BCH;
- Exchange 1 confirms the payment and sends the corresponding Monero funds to Exchange 2;
- Exchange 2 confirms the Monero payment and sends the user its LTC;
For security reasons, we limit the total trade size to 1 BTC for now, and the minimum size is 0.5 XMR for ERC20 transfers or 0.2 XMR for other chains. Minimum size is required, otherwise transaction fees would greatly distort the final value for the user. Trocador currently has more than 80 listed coins/networks, so I hope this proves useful for the community.
We are still evaluating the advantages / disadvantages for users and for the Monero community / network, as well as we're still talking to Monero devs about the utility of this service. Currently, community member ofrnxmr gave some opinions that require more analysis. If this service proves not useful for Monero community, we won't hesitate suspending it. If it's useful, we'll keep it. We'll wait community response on this to see how this goes.
We were thinking if Trocador end up processing a lot of Monero transactions (because of this service), if this might represent a privacy issue to those who use Monero. If there was some fragility that might be exploited or not. But, talking to other devs, we came to the conclusion that this service would not affect our beloved Monero. So we're good. Community response has also been outstanting, we are really glad you guys enjoy it.