OpenOcean Finance- Exploring the depths
I traveled far across CEXes, DEXes and hybrids; dug into the bowels of blockchain
In quest of answers, I reached to the ends of the social world; all about to give up
And lay ahead the vast stretch of endless OpenOcean, bearing the answers from its very depths
Blockchain technology is revolutionary and besides a lot of other breakthroughs, it aims to achieve something which our political systems have not been able to and that is transparency. There has been a shift from conventional tools of finance to cryptocurrencies and it only stands to reason that people are investing not just for better and quicker returns but most importantly, security. Crashing economies like Venezuela, Greece and Lebanon are just few examples from different corners of the world. The torch is being passed back to the people where they are the sole owners of their money. Likewise, crypto space is growing and with Defi boom, the monopoly of the Centralised systems has started developing cracks. The belief system is altering and money is flowing into truly decentralised spaces. In this vast ocean of newly found universes, technologies that can shape and alter existing mindsets is a common norm. It’s no surprise that the investments have more than doubled in past few years and it’s only growing. While all this is true, another truth staring right in our faces is that blockchain is yet to find a mainstream acceptance. From the complicated dynamics to the necessity of technical know-how, lack of required support from the governments and a whole lot of other reasons, the industry is struggling with simplification.
Most of the crypto population like me are average users with little to no knowledge about the in-depth technical aspects of the blockchain world. We want simplified solutions for problems. If the solution brings added problems, then it is no good and would always deter users from acceptance and adoption. That’s where blockchain stands right now (imho). Like for example, the complexity of converting fiat to crypto in so many parts of the world due to the restrictions imposed by the governments, or conversion of one token to another on different blockchains or the high gas fees of Ethereum. Of the existing known problems, the solutions vary thus complicating the experience for an average user. The need for different blockchains as solutions or new innovations expanding this world further, seamless integration of each is a must without which we will be stuck in our own little spaces. The silos of different blockchains need to be connected which otherwise would only prove to be barriers than solutions. In this journey of providing solutions, value transfer needs to be seamless. If I need to convert my tokens across same or different chains, it needs to happen with or without the intermediaries or the centralized exchanges, in the least amount of time, with minimum effort, at the best possible rate, and in the most simplistic way. And all this brings me to the very depths of OpenOcean.
OpenOcean — An Ocean of Options
We live in a fast-paced world, where time is valued more than anything and the reason why aggregated services are so important. It aims to save time while bringing you a myriad of options to choose from with the best possible deals. And what if this service is free? Any non-takers! Let’s delve into this OpenOcean which provides you options and opportunities like One. OpenOcean is an exchange aggregator which intends to be a one-stop solution for your trading requirements. Many a time, the most common barrier towards investing in newer projects or that 1000x coin is lack of its availability on our preferred DEX or CEX. This means treading different paths looking for lesser known exchanges eventually left with a difficult choice of whether or not to register and give KYC details and then worry about the security. A lot of other times, you might want to capitalise on a certain rate but are not able to because you are not listed on that CEX. You might also want to buy tokens on a blockchain but your funds are on a different chain. Or you simply don’t like giving out your details. If all these are your problems, looks like you don’t have to worry anymore as OpenOcean seeks to help out.
OpenOcean in the most simplistic terms aims to provide a solution through the integration of both centralized and decentralized worlds. And it is FREE. Most importantly, it saves you precious time which you can use doing so many other things. OpenOcean is an exchange aggregator which has its eyes set to connect the scattered fragments of the crypto world. It wants to bridge the gaps between various blockchains, CEXes and DEXes. The vision of the project is to create a complete cryptocurrency exchange aggregator.
- At present, it has 7 public chains, 34 DEXes and one DEX with HECO as the latest addition.
- Registration is not required and hence no KYC unless Binance is used which is the only CEX for now.
- Uses an intelligent routing algorithm to find the best exchange price, and then splits routes to provide the best price with low slippage and fast exchange.
- Service is free to use.
- Provides APIs and tools to manage automated arbitrage strategies.
Unique features of OpenOcean
- Saves you Time — If Smarty Joe is to swap the tokens, he can do it like Slow Joe by going through different exchanges figuring out the fees and rates after having invested a good amount of time or he can really act like one and use OpenOcean. Something that can take a whole lot of time is being served to you in record time combining the best of all the available options.
- Service is Free to use — OpenOcean offers transparent pricing and does not charge for the exchange aggregator service. It generates fees from custom-made UI and API designed for institutional investors, traders and institutions. OpenOcean has its goal set beyond the realms of an exchange aggregator to provide combined margin products and intelligent wealth management services. It will also offer services in the form of PME (Primary Membership Edition), a SAAS to capture arbitrage opportunities between DEXes and CEXes automatically.
- Best Prices with the lowest Slippage — Besides saving time, the goal is to find the best deal amongst a wide range of options with the best price and lowest slippage. One of the major problems with DEXes is that with high trading volumes and limited liquidity, prices will always be affected through slippage. In order to solve this problem, OpenOcean splits the order into different routes to get the best trade. And this is one of my favourite features. In order to maximize the overall return on the trade, the protocol executes it in three steps —
(a) Sourcing, involves the price quotation from DEXes and CEXes
(b) Prioritizing/Optimizing & Splitting liquidity routes, which ends up finding the best trading routes for the best price with low slippage all across the available options
© Communication & Execution, involving communicating the prices to the user and executing the order
- Same Chain and Cross-Chain Swaps — It offers swapping assets on the same blockchain or across different blockchains. Like I said before, it acts to connect and link different values spread across different blockchains without the need for an intermediary. The end result is a seamless experience for the user without the trouble of transferring your tokens across multiple exchanges and paying multiple gas fees.
- Protocol Algorithms and Smart Contracts — The protocol has public smart contracts deployed on each aggregated public chain and uses discovery and routing algorithms to find the best price. It applies an optimizing algorithm which is based on Dijkstra and D-star to get the initial best route and then constantly keeps optimizing the routes based on machine learning using platform data. It offers the best price by comparing the prices on aggregated DEXes with the best price on CEXes.
- Protects slippage losses through OOE tokens — The governance and the utility token is OOE, which is an ERC-20 token. It aims to protect the user interest by subsidizing slippage losses with OOE tokens which is a novel use case for the token.
- Future CEX Trading VIP Membership — OpenOcean intends to reward OOE token holders with large holdings in the form of fee premiums, trading fee subsidies, token withdrawal fee subsidies, and limited access to the institutional PME arbitrage tool.
- Derivatives, Lending and Insurance Products Aggregation — OpenOcean is not just an exchange aggregator but also an asset exchange service that provides comprehensive features of both CEX and DEX. In the future, it aims to aggregate centralised and decentralised derivatives trading platforms to provide derivatives trading services. It will also provide aggregate lending and insurance products, as well as investment services to help users participate in the DeFi & Cefi ecosystem and automate their asset management process.
- Security and Auditing — Nothing is completely safe as is the bitter truth with the smart contracts however, the risks can be mitigated through audits aimed at potential security vulnerabilities. OpenOcean public contracts have been security audited by Certik, SlowMist and KnownSec.
OpenOcean Versus Competitors
To be honest, OpenOcean has the first-mover advantage as there are no known platforms (atleast not to my knowledge) which provide similar services and as such classifying it as only an exchange aggregator will not be fair. There are other exchange aggregators that offer token swap options through various DEXes and listed CEXes on the same and cross-chains.
(a) OpenOcean has a total of 81 cryptocurrency pairs and 34 DEXes and only one CEX (Binance) so far. It needs a user to create an account to use the CEX service. If it intends to provide a holistic service, it will need to bring other CEXes and more cryptocurrency pairs onboard. It can also provide the service in a non-custodial way without the need for account registration or the KYC as is provided by SwapSpace and SwapZone.
SwapSpace has options in excess of 500 different cryptocurrencies, 14 instant crypto exchanges and more than 100000 exchange pairs. It also doesn’t need you to create an account unless that is a requirement of the exchange being used.
Other exchange aggregators like 1inch and Matcha have fewer public chains and are without any CEX so far.
(b) Besides being an exchange aggregator, OpenOcean has its eyes set on a whole lot of other aggregate features from derivatives, lending to insurance products aiming to bring all of these under one roof thus providing comprehensive coverage.
SwapSpace and SwapZone are exchange aggregators and nothing is planned so far in terms of adding any other features, atleast not in the immediate future as per the respective roadmaps.
© While other exchange aggregators have affiliate programs, OpenOcean may think of rewarding its users through some sort of referral opportunity. It surely helps to bring more users together.
OpenOcean has been making progress while staying true to its ambitious roadmap. It has stepped into territory where it can set its own rules. The only thing that needs to be seen is how seamlessly it manages to integrate all these solutions. It is no surprise to find some of the heavyweights from the industry (Binance, TRON Foundation to OKex amongst others) backing it. For now, it appears to be a winner heading in the right direction. With more chains like Fantom, AVA, DOT and others yet to onboard, it has the potential to harness the power of smart contracts and bring algorithms to find the best rates for the user at the very least.