“How can we massively increase the liquidity and volume on IDEX?”

This question was the focal point of a recent deep dive session with one of our strategic investors — Aenigma Capital.

The overhaul of our trading API was the first major milestone for cultivating growth with liquidity providers, but we wanted to do more. Wesley Pryor, General Partner of Aenigma Capital, and Founder of Liquid Solutions Malta (LSM) explained how all of their trading algorithms leverage the CCXT library for trade connectivity to over 130 cryptocurrency exchanges:

“When we think about deploying one of our algorithms on a new exchange, the first thing we do is check to see if that exchange is supported by CCXT. If the exchange isn’t supported by CCXT, that means we have to deploy additional resources to develop a proprietary integration. Think about it like the difference between adding another ERC-20 token to an exchange versus listing a completely new protocol token. In practice, the difference is huge.” — Wesley Pryor (Aenigma Capital/LSM)

So What is CCXT Anyway?

The CCXT library is used to connect and trade with cryptocurrency exchanges and payment processing services worldwide. It provides quick access to market data for storage, analysis, visualization, indicator development, algorithmic trading, strategy backtesting, bot programming, webshop integration, and related software engineering. It is intended to be used by coders, developers, technically-skilled traders, data-scientists, and financial analysts for building powerful trading algorithms, and is quickly becoming the backbone to the cryptocurrency trading ecosystem.

During our deep dive, it became readily apparent that integrating with CCXT was the next logical step in driving centralized liquidity to IDEX.

“We have built the most widely used hybrid-decentralized exchange in the world, and we are now working to decentralize each remaining centralized components through the AURA staking network. Teaming up with LSM helps increase the value of that network by breaking down technical barriers and opening the door to algorithmic traders and the additional liquidity they bring.” -Alex Wearn (CEO, Aurora/IDEX)

What Happens Next?

We have teamed up with LSM to leverage their extensive experience and development resources to expedite the integration with CCXT. LSM has already completed testing of their integration in Python and will test and commit integrations in JS and PHP in line with the CCXT contribution guidelines outlined here.

What are the Implications for AURA Stakers?

Given that 100% of the fees collected by IDEX and Aurora are ultimately going to be distributed to AURA stakers, a significant increase in exchange volume will result in significantly increased rewards distributed to those running AURA nodes.

The Aenigma team highlighted the valuation mechanics of the AURA network in an interview with Bitcoin Magazine, adding:

“As backers of the AURA staking protocol and success of IDEX, our venture approach is to assist the IDEX team, not only with thinking through the architecture of decentralizing each component of the exchange, but also on driving liquidity and user adoption to the exchange. CCXT integration was the lowest hanging fruit on the path to massive liquidity, but we are excited to leverage our expertise and work with the talented team at IDEX for future developments.”

Providing Proprietary Tools to IDEX Traders

LSM will consider granting access to one or more of their trading algorithms to the IDEX community to help foster participation and adoption of the AURA staking network. This would enable non-technical traders to experience the excitement of algorithmic trading and become more vested in the AURA staking network through the receipt of participatory market making rewards.

“This comes as a cost-benefit approach of making quantitative trading tools more accessible to the greater public, which could drive more volume to the exchange and more revenue to the network,” said Pryor, “but it comes at the cost of reducing the pro-rata proportion of awards that we are able to generate internally. This is a decision that we will continue to consider in the coming months as we work through the more pressing issues such as CCXT integration.”

We look forward to sharing more as this exciting integration develops!

~The Aurora/IDEX Team