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Purchase cryptos at the best market price!

Author: LB 2020-07-02 258

The size of the cryptocurrency market is much smaller than that of the fiat currencies. This is a very important aspect that should be considered when one is looking for a stable trading environment. On traditional exchanges transactions are executed almost in real time and these systems operate with high efficiency. Cryptocurrency exchanges are a little bit different and continuous innovation is necessary to keep these systems running. The recently released Matcha project is trying to revolutionize this field.


When someone is trying to buy or sell cryptocurrencies using an exchange two important things matter the most. These are time and price.


Time has two types here. If we are talking about selling time is required to find a buyer and time is also required to validate the transaction. Transactions are validated on the Blockchain and we have to wait for a few minutes for our transaction to be validated. The speed of this cannot be determined by the exchange.


Speaking of the price, one has to considered the so called "slippage", which is a difference in price between the time of purchase and the time of order. The longer the seller has to wait the larger this slippage will be. You can think of it as buying a bottle of milk in your local grocery store, but even though the price tag says $2 you have to pay $2.5 when you get to the counter, because the milk's market price has changed. Obviously, in a digital system this change is more significant.


Rapid crypto transaction with mitigated slippage


Clearly, if a crypto exchange does not have enough users it will face liquidity problems. In other words sellers and buyers will have to wait a lot for a transaction to take place. There are peer-to-peer systems that support decentralized transactions between individual users.


The recently launched Matcha project released a web application based on the 0x protocol. This is a DeFi solution to mitigate the above mentioned problem.


Matcha connects liquidity from Oasis, Curve and other exchanges to distribute transactions in a much larger user base.


When we want to purchase cryptos using the Matcha platform our order gets distributed on 2-3 crypto exchanges and it will try to combine sales and purchase so that we will always get the best market price or in other words they do an optimization in price space between various crypto exchanges.


This idea is not completely new, because 1Inch, Paraswap, Uniswap and Kyber have already developed similar solutions.


What is new in Matcha?


Most importantly its web interface. While some of the previously mentioned platforms might be difficult to use, Matcha's web interface has been designed for convenience. There is basically no need for registraton and as soon as we choose our desired crypto currency Matcha will find the best crypto exchange combination for us and we will have to send the requested amount of crypto currency to the give wallet address.


What kind of currencies are supported by Matcha?


Matcha mainly supports currencies that are pegged to a certain fiat currency. This could be for example Dai, which is pegged the the dollar. This means that 1 Dai will always be convertible to 1 USD. A similar crypto currency is USDC or the USD Coin. The value of these currencies equal to 1 USD as well. This is achieved by storing USD on a strictly monitored bank account. The amount of this USD equals to the amount of USDC issued.


This means that if you wanted to transfer 1 USDC from the Philippines to Columbia our transaction will be validated in a few minutes and the transfer will be identical to transferring 1 USD from Philippines to Columbia, albeit will less fees.


The goal of the developers at Matcha is to create a platform similar to Robinhood to target younger generations and introduces the world of cryptos to these new users as well.


In fact, the Matcha platform only supports a few crypto pairs. The future goal is to provide a trading platform that supports several thousands of cryptos for traders.


Rapidly growing user base


A few days prior to writing this article, the cumulative trading volume surpassed $2M, which is an achievement that is worth mentioning considering that Matcha was launched only a few days ago.


You can follow the performance of the platform if you use the following link: https://explore.duneanalytics.com/public/dashboards/9ZKcuL1TM0wQSp2hgj5Nbpq5WP6GZX1XCVYEh4eX


The Matcha API


If I understood well, Matcha is nothing more, but a web interface for the 0x protocol and you can read more about the implementation details on GitHub:


https://github.com/0xProject/0x-api


This is an international project with contributions from the US, Italy, Australia, Sweden and Germany.


If you are interested and in a possession of a Ubuntu or a Mac OS system, you can use the following command to test the protocol:


$ curl "https://api.0x.org/swap/v0/quote?sellAmount=100000000&buyToken=DAI&sellToken=USDC"


You can support me using the following BTC address: 1D6qYk7mWQFE1K5tUgqimjiCLT66AHdyNX


Illustration: dungthuyvunguyen from Pixabay

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