Two years ago I wrote an article about how the word “decentralized” was being deceptively deployed as a marketing gimmick, specifically in relation to “decentralized” exchanges such as EtherDelta, Waves Dex, and the 0x platform. Even now that deceptive practice is still going strong, but it was clear back then that someone needed to fill the void of a proper decentralized exchange for the Ethereum ecosystem.
Flash forward to today and we are only weeks away from launching the world’s first truly decentralized exchange. It’s a surreal moment for sure.
As my co-founder Ian and I sat down to tackle this problem we identified 2 core issues facing existing solutions; centrally controlled accounts, and off-chain market making. I went into greater detail of these problems and more back in 2018, but here are the highlights:
1. Centrally Controlled Accounts
“Another problem with order matching is the requirement to hold funds in a separate escrow account to secure trades, slowing down the trading process for both buyers and sellers. This once again forces users to trust intermediary escrow accounts to secure their funds and function as intended.” — 2018 article
This is the most obvious flaw and completely defeats the purpose of a decentralized system. Trusting a third-party to manage and secure your private key is a blatant forfeiture of one’s autonomy and self reliance. When a platform claims to be decentralized yet it has a signup process involving a hand off of keys or assets, this is decentralization in name only. At best the use of the word “decentralized” is purely for marketing purposes; at worst this is done to obfuscate the truth and subvert the law till lawmakers catch up with the technology.
2. Off-Chain Market Making
“Centralized order matching once again brings to surface the issues of centralization that users are trying to rid themselves from, such as trust in a third-party, susceptibility to a malicious attack or loss of funds.”
Originally proposed to reduce the cost of transacting tokens on the blockchain, off-chain market making like EtherDelta or 0x is a form of re-centralization. While this is distributed trust at best, it is nonetheless more reliance on a trusted third party; Literal middle-men making profit off of spread betting and other schemes.
Our Solution: The Rogue Protocol
Yes, protocol! The user interface for Rogue does provide the same core features one would expect to see from an exchange, but under the hood (and accessible in advanced features) is a protocol designed to facilitate properly decentralized peer-to-peer trustless token transfer.
Trustless? Yeah, I’m getting to that…
The Rogue Agent
The Rogue agent is a special token that replaces the role of a trusted third-party and is the core innovation to the protocol where its programatic capabilities establish a trustless entity.
In a nutshell a client creates a rogue, encodes and transfers instructions to the rogue with the tokens related to these instructions, and directs the rogue to a target where these instructions can be completed.
There’s a lot to be said about this, but I want to keep this article brief so I will leave the deep dive for another time.
Client Side Order Matching
To leave order matching entirely up to a smart contract on Ethereum would incur a tremendous amount of gas. This has been true for a while now and even though Ethereum is constantly being improved upon, naively implementing such a system will always be prohibitively expensive. This was the core reasoning for off-chain order matching as reading the blockchain is free and much faster compared to an entirely on-chain implementation.
Our solution to this re-centralization problem was to implement a client side “best guess” order matching hint system. The client interface reads the blockchain for free and determines the current best position for their order, which is handed to the on-chain smart contract. The smart contract will use this hint information to shortcut list insertion while not entirely relying on the trustworthiness of the information. If the client sends the most efficient position for the smart contract to use, their gas cost will be competitive with Uniswap transaction costs (ERC20->ERC20 ~90k gas).
Rogue is Free
We could easily place taxes and fees on the first DEX smart contract we launch, but we are not doing that. Why? Rogue is a truly decentralized protocol. We believe in the future of Ethereum, we believe in its mission to be “Unstoppable, Immutable, Forever”, and we believe the individual has rights to freedoms and civil liberties that decentralized technology can enable. We believe Rogue is something special and will have a lasting impact on the future of blockchain. Profiting off of something like that which requires no overhead on our part, just seemed wrong.
Donate & Follow for Updates
Rogue is completely free and open-source. It’s development depends on contributions from Ethereum citizens like you! Please check out our landing page and consider donating so we can keep putting in the already countless hours to make Rogue fully featured and extensible. If you donate 0.25 ether or more and live in the U.S., you can fill out our form and claim a Rogue pin as a thank you for your contribution!