As the cryptocurrency market continues to evolve, we have witnessed various instances of chaos, collapses, and fraud breeding fear, uncertainty, and doubt. At the just concluded Avalanche Summit II David Wells and Phil Writjes of Enclave Markets stated that the root cause of these issues lies in the vulnerability of marketplaces, which are often centralized despite the decentralized nature of the industry.
The team added that addressing the issues means bringing on board a market infrastructure that has the core values of decentralization, security, and fairness.
Truly, traditional markets have largely influenced the development of cryptocurrency exchanges, with centralized entities controlling order books and user funds. Unfortunately, this centralized model has led to unethical practices, the team mentioned.
Fast forward to the DeFi summer of 2017-2018, when decentralized exchanges (DEXs) emerged as a solution to the problems of their centralized counterparts. The Enclave team analyzed that DEXs allowed users to retain control over their funds, eliminating the need to trust centralized exchanges with their money.
Additionally, the team mentioned that these platforms, also enabled users to create liquidity pools and establish markets. However, DEXs introduced their own set of challenges, particularly the lack of compliance, which hindered institutional participation.
According to the team, Enclave Markets aims to merge the characteristics of centralized and decentralized finance by integrating the best aspects of both models. “It provides users with the opportunity to trade on a fully encrypted exchange that offers the privacy and fairness associated with decentralized platforms while incorporating the performance and market structure of centralized exchanges,” the team said.
The value offered by Enclave Markets, can be summarized in three core features. First, is the confidential marketplace, where trades remain hidden from the exchange operators. The second feature is tamper-proof technology, ensuring that no unauthorized changes can be made to the codebase. The team states that this is achieved through an external network of independent third-party attesters who review and approve any updates. Lastly, Enclave Markets emphasizes decentralized custody, giving users complete control over their funds and protecting them through the network of attesters.
However, implementing these features involves a technical framework that utilizes advanced hardware technology and follow a decentralized system. The team affirmed that Enclave, a hardware technology similar to the one found in iPhones, serves as a physically separate security environment. “It is inaccessible except through the network of attesters, which guarantees the validity and integrity of the codebase.”
Some of the Enclave Markets offer include Enclave Cross, an over-the-counter (OTC) marketplace that executes trades based on external pricing oracles. Enclave Spot, a recently launched fully encrypted spot market according to the team, provides all the benefits of traditional spot markets within the fully encrypted exchange model. It offers market and limit orders, with more advanced order types planned for the future.
Moreover, Enclave Markets plans to start working on the futures market and to enhance its existing products. For Enclave Cross, improvements include internal order routing and the introduction of OTC pricing bands. This feature allows users to select specific parameters for their trades.
Enclave Spot will see the addition of margin trading and more advanced order types, the team said, adding that, Enclave Markets aspires to expand its asset offering and collaborate with various projects to create a range of products and institutional-grade marketplaces.
The team announced the introduction of an incentive program to commemorate the launch of its recent product, Enclave Spot.
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