Serum

Serum is a decentralized exchange built on the Solana network with a vision to bring a high performance DEX that can accommodate fast transactions at a low cost.

What is Serum?

  • Serum provides an on-chain order book for traders to trade conveniently and securely on the platform. This order book-based trading is considered more convenient by many compared to other DEXes due to similarity with centralized exchange. However, the platform also offers swapping features.
  • The fact that it is built on the Solana network gives advantages to Serum DEX to provide a lower transaction fee as much as around $0.001 per every transaction. Besides that, transaction processing is also relatively quick. The platform is estimated to be able to handle 50 to 65 thousand transactions per second.
  • 80% of the exchange fee collected will be distributed to SRM buy and burn pool, and the remaining 20% to SRM token stakers.
  • Serum also has a pool feature where a group of users can collaborate to perform actions as an automated market maker (AMM) system on the platform. 
  • At the time of writing, Serum DEX lists 30 digital assets paired with USDC and USDT. Besides that, Serum DEX also has an Add Market feature to let anyone create their own DEX on top of Serum DEX.

Key Metrics

TickerSRM
Token NameSerum
Token Type/ProtocolSPL/Solana and ERC20/Ethereum
Total Token Supply10,000,000,000
Current Circulating Supply See Coinmarketcap
Market CapitalisationSee Coinmarketcap
Token Creation DateAug 2020
Can it be mined?No

Who is behind Serum? 

Serum was founded by the idea of Sam Bankman-Fried and some members of the FTX exchange, around the beginning of 2020. Bankman Fried is an MIT graduate and a former trader at Jane Street Capital.

After that, Serum is launched and supported by some notable institutions in the blockchain field such as FTX (that has Bankman-Fried as CEO), and Alameda Research trading firm (founded by Bankman-Fried in 2017, and he is also currently the CEO of the company).

What is the purpose of Serum? 

Users of Serum DEX will get a discount for trading fees by using SRM as a token for payment. Besides that, SRM also has other utilities such as; earning -up to 50%- fees on Serum platform transactions, earning staking rewards by having at least 10m SRM and 1 MSRM. 

Insights

The demand for decentralized exchange remains strong on the blockchain market because of the belief in the initial vision of bitcoin that blockchain is built to be decentralized and censorships free. However due to the limitation of technology, DEX growth is considered to be relatively low. Serum model and platform design are interesting and might really be able to tackle the existing obstacle that the space is currently facing.

  • Serum token performed very well in its first year and after being listed on Binance, the token went astronomical to 10x from $1 in August 2020 to more than $11 in May 2021.
  • Despite being built on Solana, Serum is fully interoperable with the Ethereum network. 
  • Serum is initiated by an experienced trader, and supported by another reputable trading firm. As a result, we agree to say that the foundation of the platform is built for the convenience of traders.
  • SRM token for early institutional investors and the team is vested for 7 years. This is one of the longest vesting periods in the industry and it conveys a message that the existing early backers of the projects are here for the long game. 
  • The SRM token burn mechanism might also be worth considering as a potential significant key value driver of the token price in the long run. 

Risks

  • Bankman-Friend is considered to have a huge impact on the success of Serum. However, considering his significant influence and his role as both CEO of Alameda Research and FTX exchange, there is a potential conflict of interest that might disadvantage retail SRM token holders. 
  • Solana technology is considered new, there might be undiscovered risk or security flaws. Serum could easily migrate to another blockchain platform; however, it seems like its platform is specifically designed to rely on the Solana network. Migration to, for example Ethereum will result in different performance of the Serum platform. 

News and Updates

  • Jump Trading, market maker behind trading platforms like Robinhood, Bitfinex, and Bitmex has invested a significant amount of capital in Serum in late 2020.
  • There have been several projects built on Serum network such as Symmetry Swap, a fast SPL token swap platform. 
  • The Serum DEX has surpassed $5.4 billion in trading volume since launched. 

Community & Whitepaper Links

Disclaimer: 
All investment is speculative and involves substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.  

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