Serum

Serum is a decentralized derivatives exchange with trustless cross-chain trading built natively on Solana and is interoperable with Ethereum. The Serum team focuses on speed and keeping costs low for traders. The Serum DEX went live on August 30, 2020^[1].

Overview

Serum is different from most DeFi-based exchanges. It is a DeFi protocol that is non-native to Ethereum. However, it is still integrated with the Ethereum blockchain and is fully functional with ERC-20 tokens^[2].

Features

Speed and Cost

DeFi's growth has been inhibited by slow networks and high gas fees that are a barrier to both developers and speculators. Serum allows its users to have control over their assets by providing the same speedy low-cost trading that centralized exchanges offer for Ethereum based tokens.

Decentralization

Serum aims to be a pure DeFi protocol that stays true to its terminology. Despite the fact that a fully decentralized protocol is computationally intensive, Serum runs with low costs leveraging Solana’s scaling capabilities.

Cross-chain Support

There are different types of cross-chain programs implemented in different protocols, the majority of which have a little bit of centralization. With Serum, a user could trustlessly swap assets between different chains. One can trade Bitcoin with Ethereum or any other ERC-20 token and vice versa.

It offers a fast DEX with cross-chain support without the need for oracles nor tribunals.

Tokenomics

SRM is Serum’s native token which gives holders governance power over the network. In addition, all of the net fees in the exchange will be used to buy and burn SRM tokens.

Besides governance, SRM’s is also useful in:

Holding SRM gives users up to 50% discount off all fees;
SRM can be used to pay fees;
SRM can be staked.

Serum BTC and Serum USD

Serum BTC is a wrapped utility token in which the price is pegged or tied up with its underlying asset or BTC form. It’s also an entirely decentralized Solana-based BTC token^[3].

Meanwhile, Serum USD is a decentralized wrapped stable coins that follows both ERC-20 and SPL tokenizations for USD.

Growth

Within its first day of release in mid-August, Serum's token SRM surged over 1,880%. Many attribute the price jump to investor confidence in Sam Bankman-Fried who previously founded FTX and Alameda Research which are both leaders in the cryptocurrency sector. Not long after, on September 1st, 2020, the token hit its all-time high of $3.78.

On September 3, 2020, it was announced that Jump Trading, a Chicago-based high-frequency trading shop and market maker, would be backing Serum officially as a liquidity provider and as an investor. Serum's Bankman-Fried explained that this initiative is an important step for the growth of the DeFi space. Jump Trading is well known as the market maker for Robinhood Markets, Bitfinex, and BitMEX^[4]^[5].

SRM Token

SRM exists as an SPL token on the Solana blockchain and an ERC20 Token Standard on the Ethereum blockchain. It has a maximum supply of 10,000,000,000 tokens. It can be staked to reduce trading fees on the DEX. 1 million SRM tokens can be converted into one MegaSerum (MSRM), which is the amount that needs to be staked to run a validator node^[6].

Project Serum hosted two simultaneous initial exchange offerings (IEOs) for the SRM token on August 11th, 2020. These took place on the FTX and BitMax.io cryptocurrency exchanges. 6 million SRM were sold in total and $660,000 USD was raised. KYC was required and only 1800 participants were allowed to participate.

400 MegaSerum, or 400 million SRM, were sold in a pre-sale at a price of 8,000$USD per MSRM.