A University of California Berkeley blockchain group is partnering with digital asset platform, KyberNetwork, to do research on ways to establish improved decentralized exchange.
The group calls itself Blockchain at Berkeley, publicized the new partnership.
It said the two organizations would review different aspects of trading.
This includes, strategies and sustainability, particularly within KyberNetwork’s early-stage exchange model.
The two entities have formulated a three-month roadmap.
This will determine possible issues and come up with solutions, according to a press release.
Loi Luu, Kyber’s chief executive and co-founder, said:
“We see the power of [decentralised exchanges] to influence adoption of the technology by mainstream users. Berkeley students, energetically focused on innovation and creative problem-solving, are an excellent group to help extend KyberNetwork’s ideas and creative energy.”
While centralized exchanges utilize the orderbook model to take away trading risks, decentralized alternatives go another route.
The release explained:
“The exclusion of orderbook in Kyber Network’s model means that the calculated price of these tokens have to be very precise in order for the exchange to stay competitive while keeping the risk of reserve depletion low”
To counteract this factor, Kyber is emphasizing the significance of keeping a reserve for the exchange.
Kyber will also keep an eye out for the value of its inventory and maintaining accurate prices.
For the research parameters of the project, the team is considering four parameters.
These are: how long it takes to rebuild the reserve, how many tokens each user can transact with simultaneously, tokens prices and lock-up times for reserve contributors.
The research partnership will include students, faculty and employees.
Researchers, engineers and others will also take part to cultivate concepts, undertake the research and “transform concepts into reality in measurable ways,” according to the statement.
Back in August, Luu stressed that centralized exchanges are potentially incapable of handling massive volumes of users.
He also labelled decentralized trading platforms as a better alternative.
However, he said, decentralized exchanges are not as user-friendly as centralized options.
He added that these may not have the resources to back mass trading due to small numbers of users.
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