Home Bitcoin & Crypto Guide Switcheo Network – Understand How OTC Trading Works

Switcheo Network – Understand How OTC Trading Works

Switcheo Network offers OTC trading, which allows buyers and sellers to connect directly and perform crypto trading depending upon the conditions set by the involved parties.

Switcheo Network - Understand How OTC Trading Works

In our previous articles, we have explained how you can use the Switcheo Exchange, the Switcheo staking platform, and how you can use the Zilswap protocol. Apart from these three important features, Switcheo also allows users to do OTC Trading. In this article, we will explore how you can do it, as well as the remaining features supported by the Switcheo network.

Switcheo OTC Platform

The Switcheo OTC trading platform allows crypto buyers and sellers to connect directly. The involved parties set the trading conditions, and once agreed upon, they perform the trade without using any exchange facility.

Currently, the Switcheo network offers OTC trading for both the Ethereum and NEO networks. It offers a very low fee, and to minimize the risk of trading, it uses a smart contract to act as an escrow.

Important: For OTC trading, users need to have the minimum amount in the contract balance.

Login to the Switcheo OTC platform by using this link.

Switcheo OTC Trading

Connect your MetaMask wallet (Ethereum network).

The users who initiate the OTC trading fill the following details in the fields:

  • Input token
  • Receiving token
  • Amount of input and output token
  • Counterparty address

The platform automatically enters your (initiator’s) wallet address in the My Address field.

Switcheo OTC Trading

Confirm the transaction by clicking Create & Sign.

The transaction will appear in the Pending Trades window. The counterparty needs to accept the transaction to complete the trade.

However, we have noticed that there is some issue with the OTC platform (Ethereum network), and it was throwing an error.

Switcheo OTC Trading

We have communicated the issue to the project team. We will update the guide once again when the issue is resolved.

DEMEX

Demex is the first fully decentralized platform that supports any type of financial market possible. It is set to run on the Switcheo TradeHub decentralized trading protocol.

Switcheo Foundation

Switcheo Foundation is an ambitious non-profit project that aims to create a truly open, self-regulating financial market without any intervention of central authority.

Listing Policy On Switcheo

To list on the Switcheo DEX, the token projects must meet at least one of the following criteria:

  1. Have high utility.
    • Have more than $50m market capitalization.
    • Strong demand for token due to high usage (utility).
    • High global liquidity allows external market makers to voluntarily participate with low exposure risk.
  1. Will conduct an initial listing on the Switcheo Exchange.
    • Has raised above $1m.
    • Up to 10% raised should be committed to providing liquidity until their token is fully usable (utility unlocked).
    • Has not been listed on any major exchange.
    • Have strong eventual tokenomics (demonstrates utility).
  1. Will provide liquidity through the Switcheo DEX’s market-making partners.
    • Have more than $3m market capitalization.
    • Have strong eventual tokenomics (demonstrates utility).
  1. Is a stablecoin.
    • Is either algorithmic or backed by a Trust company.
Switcheo Account Security Features

The Switcheo Network offers the following security parameters to maintain a high level of safety in the system as well as to the traders.

    •  Multi-layer Trustless Encryption – The mnemonics stored on Switcheo are encrypted with the user’s password. Using an isolated service, Switcheo offers an additional layer of encryption that further encrypts this already-encrypted-mnemonic with a strong server-side encryption key before it is stored in the Switcheo database.
    • Two-Factor Authentication (2FA) – Users need to set up two-factor authentication (2FA) before starting trading.
    • Anti-Phishing Code – Users need to set up anti-phishing code while creating an account.
    • IP Address Verification – The user’s IP address and their location is saved and marked as trusted while verifying the email address during account setup. Each time, the system verifies your details when you try to login with your account. If it is not trusted, then you are required to enter the security code sent to your email.
    • Isolated Decryption – The wallet’s mnemonic key is decrypted completely on the front-end web application without any network communication that protects the exposure of secret keys from the intruder.
Fees

The Switcheo network has a defined fee structure for users. And they have categorized the fee depending upon various levels.

The different fee structures are as follows:

Trading Fees
  • Maker: A maker is a person who has placed an order, and the order gets added into the open order-book but it is waiting to be matched. No fee is charged when another user fills your order.
  • Taker: When the order placed by you is immediately matched against an order in the order book, in that case, you are a taker. Takers need to pay the full taker and network fee as the activity reduces the exchange’s liquidity.
  • Swap: For cross-chain atomic swap trading, a taker and network fee is charged from the taker.

Switcheo OTC Trading

Deposit Fees

Users need to deposit some ETH in the secure contract before doing trading. The trade amount, along with the gas fee, is deducted from this secure balance.

Below is the list of the fees charged for depositing tokens.

Switcheo OTC Trading

Withdrawal Fees

The withdrawal fee is different for Switcheo account users and non-Switcheo account users.

  • Switcheo Account Users

Switcheo account users are subjected to slightly higher withdrawal fees as two blockchain transactions are required.

Users need to pay charges for transferring tokens from their secure contract to their wallet balance and again from their wallet to the receiving wallet.Switcheo OTC Trading

  • Non-Switcheo Account Users

Non-Switcheo account users are charged a withdrawal fee in the withdrawal token’s denomination to transfer the tokens from the exchange smart contract back into your Switcheo account wallet.

Switcheo OTC Trading

Network Fees
  •       Ethereum
            • Maker: Free
            • Taker: Typically – 170,000 to 870,000 GAS x (ETH Gas Price)
  •       NEO
            • Maker: Free
            • Taker: 001 GAS to 0.002 GAS
  •      EOS
            • Maker: Free
            • Taker: Free

 Conclusion

The Switcheo Exchange is one of the very few platforms that provide support to multiple blockchains together. The platform was initially built on NEO but currently supports Ethereum (ERC-20) and EOS tokens. It also allows for cross-chain and OTC trading. The interface is simple and user-friendly. The exchange supports more than 18 languages, which is a plus point. Altogether, it has many attractive offerings that can gather user attention.

 

Resources: Switcheo Network website 

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