STX.Swiss Launches Decentralized Security Token Exchange
Based on the Ethereum network, the exchange is now open to hosting STO tokens.
STX.Swiss has already started activity as one of the first decentralized exchanges dedicated to the sale of security tokens, the firm announced. The exchange has opened its doors to issuers of security tokens, both for already existing securities, and for startups intending to issue new tokens.
The STX.Swiss network is built over the Ethereum blockchain, one of the traditionally used networks for the creation of tokens and smart contracts. The market operator chose Ethereum for its simplicity over the 0x protocol.
“Swapping tokens on Etheruem isn’t complicated. The ERC20 standard is well designed for it with approve and transferFrom. So we built a simple Exchange smart contract with an on-chain order-book that enabled a decentralized, non-custodial DEX. No wrapping Ether, no fees (value held in escrow by the Exchange automatically loaned via Compound.finance), and around 100 lines of code.
This exchange was part of our open HackerOne bug bounty and was audited by Chain Security,” said Michael Dietz, one of the project’s chief developers.
The decentralized exchange uses the Uniswap protocol on the Ethereum network, achieving zero-fee exchanges, as well as censorship resistance and security. The exchange is open to anyone with Coinbase mobile wallet, Metamask, and TrustWallet, the wallet acquired by Binance in 2018.
STX.Swiss claims to be offering a peer-to-peer protocol for trading, thus avoiding the expensive creation of a centralized exchange. In the past, decentralized exchanges with no leading authority and order book matching have managed to avoid regulations. Still, there are hypothetical restrictions on offering the service.
The new exchange will start activity with a handful of digital assets that are not unanimously considered “security tokens”. For this reason, using STX.Swiss will not require a KYC procedure for those trades. But after listing security tokens, the market will perform a screening of its traders and require identity verification.
Security tokens are still in development, as running an STO is more complicated and depends on the jurisdiction for acceptance. Currently, security token trading is extremely limited, and most digital assets try to avoid the security label.