AXNET's DEX works by connecting a combination of smart contract, high speed trading engine, and a transaction processing arbiter system. The combination of these 3 elements allows us to create the a high-speed decentralized trading platform. The first component, which is our smart contracts, are designed for trustless storage of all assets and executing trade settlement, and all trades must be authorized by the user’s private keys.
The reason that AXNET DEX is special is that, unlike other decentralized exchanges, the AXNET DEX smart contract is designed so that only the exchange is authorized to submit signed trades to Ethereum creating a strong balance of security but remaining decentralized. This enables AXNET DEX to control the order in which transactions are processed, which breaks the transaction into two components. The two part trade system allows us to separate the act of trading from final settlement.
When an AXNET user performs a trade, the exchange balances are updated in real-time, while simultaneously their private keys are used to authorize the trade in the contract all on the user client side. This authorization prevents users from rescinding any completed trades, and prevents AXNET DEX from initiating any unauthorized trades.
Afterwards the last component kicks in which authorized transactions are then passed to the arbiter which manages the queue of pending transactions, dispatching them in sequence to ensure that each trade is mined in the correct order and that the smart contract balances stay in synch with the exchange balances. By controlling the transaction sequence, AXNET provides the speed and user experience of centralized exchanges combined with the security and audibility of decentralized exchanges.