InstantDEX (iDEX) is decentralised trading middleware. It is a piece of software that sits between the user and exchanges and matches trades in realtime. In this respect it is different to traditional, centralised exchanges, which represent a single point of failure. It is also different to the blockchain based asset exchanges of some 2.0 cryptocurrency platforms, because it is not dependent on blocktime for completing a trade.
InstantDEX operates in realtime, but it is decentralised. This means it offers the best of both worlds over cryptocurrencies and the centralised exchanges they generally trade on. Moreover, iDEX compiles composite order books from many different sources, giving greater depth and liquidity than any single exchange. This means smaller spreads, better security, and greater profits.
InstantDEX is a piece of software users download to their own computers, like a cryptocurrency client. These nodes communicate directly with each other to negotiate a trade. InstantDEX accesses many different sources of liquidity: blockchain-based asset exchanges, such as the Nxt asset exchange; the distributed Multigateway, which trades assets representing coins on a peer-to-peer basis; orderbooks from centralised exchanges such as Poloniex and Bittrex, via API keys; and more. Because of its open architecture, developers can add their own options in the future.
InstantDEX communicates with other nodes on a peer-to-peer basis, agreeing trades in a fully decentralised manner. Liquidity comes from a wide variety of sources. These can be determined by the user, who has to provide API keys for any centralised exchanges used. Orderbooks are therefore as centralised as the user wants.
Although many users will not want to trust centralised exchanges, others will want to connect to them to access their liquidity and arbitrage orders from other nodes. Whether or not users want to use centralised exchanges, they will therefore benefit from the increased liquidity and lower spreads provided by iDEX’s composite orderbooks.