Many crypto analysts have been making a case for decentralized platforms such as the Komodo AtomicDEX. The main drive for such platforms is security of funds mainly because traded assets remain with the owners.
This is unlike centralized platforms that store the users’ assets and are prone to hacks as a result of holding high volumes of funds, sometimes in hot wallets.
However, the challenge faced by decentralized platforms is liquidity. The Komodo team has reiterated its claim of high liquidity of the Komodo AtomicDEX.
To encourage liquidity, the platform introduced the Komodo 5% Active User Reward. A release posted last October on the reward program stated:
“Any Komodo address holding an unspent transaction output (UTXO) of value greater than 10 KMD will begin earning a reward once the lock time is set about 1 hour after a transaction that creates the UTXO is mined. The rewards will stop accruing 1 month after a transaction to reward active users, so claiming your reward at least once a month is recommended. If the reward is claimed at least once a month, the total reward adds up to 5.1% in a year.”
This has contributed to the liquidity enjoyed by the users of the platform. That doesn’t mean that the AtomicDEX doesn’t have its downside. According to a user of the platform Camillo Lopez,
“The funny thing is if you have a order for kmd at 70 cent when you start the swap and 30 minutes later the price go up to 78 cents you will be happy. But the others party will be mad because have been looking at the price go up without having the chance to buy back. Or go down and you are stuck on a trading looking at the price go down. It is a fact that the speed is important if you don’t want mad customers.”
Users have had mixed experience with the platform, for instance, one Daniel from the Telegram channel said, because litecoin is one of the faster coins. When you swap BTC to KMD for example, first a tiny fee transaction is done on the BTC chain, which can take an hour or so since miners prefer larger amounts to include into a block. After the fee has confirmed on the BTC blockchain, then the taker payment is sent and can also last another hour to confirm. Only then the swap can proceed. During this whole time you hope that the maker doesn’t close or shut down his phone or goes offline or change his mind due to rate fluctuations.
The admin of the channel, Ragnar said that trading proxy tokens is always a possibility, though generally not the most preferred. I could see a future where 0conf makes a return which would definitely drive value to KMD. Or even Atomicdex with an option to do “instant swaps” that are either 0conf or proxy. And then having AtomicSwaps as the baseline since it is the safest.
Right the smaller trades are the ones that need to be faster, and are also the easier ones to “go fast” since having KMD collateral for a $15 trade isn’t a big deal