IOB: Frequently Asked Questions — FAQ— IOB Smart Exchange (SmX) for HFT Traders

 5. IOB Smart Exchange (SmX)

What is the IOB Smart Exchange (SmX)?

Focused on the social, decentralized, and distributed crowd wisdom trading, the Smart Exchange is a P2P trading platform for professional, experienced and high volume traders. IOB SmX has high frequency Arbitraging and position trading strategies built in for qualified institutional traders. Traders can also develop and share their own trading strategies on SmX.Aside from its initial KYC/AML processing, traders are required to hold certain amount of IOB token to be qualified.

What are the differences between SmX and other exchanges?

Currently, all P2P exchanges are not at all in demand with professional traders, who need fast transactions to make timely deals. In their current state, these exchanges generally lack of robust features and functionalities that are required by sophisticated professional traders. As of now, they are only useful to people interested in the specific advantages they offer — the increased resilience, privacy, security and freedom of payments.IOB SmX aims to offer:

• Institutional infrastructure;
• KYC/AML to be qualified as a trader;
• SmX Reputation Scores;
• HFT trading strategies;
• It is non-profit!

Are you building an exchange for hardcore traders?

You bet! We are planning a decentralized trading platform with preset trading strategies, and build-your-own trading strategies that will give an experienced trader a platform to easily build trading strategies without a single line of code. In addition, traders can mirror the trades from selected peers.

How does the SmX work?

All long and short trades are matched through our P2P Trader Discovery & Match Protocol. IOB SmX does not hold traders’ funds. All trades except ‘Open Short” type are executed among the traders directly with each other without any trusted third party to process all trades. Instead of matching orders in the order book, SmX matches the people behind those orders. That is, whenever a matching buy and sell order is found, the SmX software does not immediately process the trade, but instead, it connects the buyer with the seller, allowing them to conduct the deal based on preset or their new HFT strategies without any intermediaries.For Open Short trades, a portion of the trader’s IOB Reserve Requirement is temporarily locked by a smart contract automatically as a collateral for the Asset Loans through the hash time-locked contracts and will be released immediately when the short position is closed. A trust is removed during every trade, except that every trader must pass the initial due KYC/AML due diligence process and meet our minimum reserve requirement.Trades use a single hash in a checklocktimeverify account which is shared between two parties. Two transactions on each chain take place using asynchronous timelocks. This allows both parties to trade securely and safely directly with each other (p2p) without funds ever being deposited anywhere else. It is the only truly decentralized exchange method. Front running is also eliminated as all orders are stored off chain on the Service Nodes. You can read more about nodes below. It offers a high resistance to transaction censorship with professional trading strategies. It is cheap, private and secure to use.

If it is non-profit, how can IOB make money out of SmX?

IOB does not plan to make a profit on SmX. Each trade that is filled incurs a tiny trading fee that is then automatically exchanged for IOB at the moment a trade takes place. 100% of this fee is then distributed to the Staking Nodes (for processing transactions) and Service Nodes (for supporting anti-spam and anti-DOS measures). All trades are swaps that take place via the SmX protocol.It gives the professional traders the peace of mind that there is no front-running and manipulation on SmX.

Sounds fantastic, but will it be too expensive for me as a trader?

No. We will not charge commission, nor a transaction fee. The small transaction fee is not centralized but instead distributed to those helping support the services (Staking and Service Node operators) around the world.It is an entirely new exchange and trading business model.