There's a new DEX in town.
https://serai.exchange/
I'm part of a small degenerate gambling club here on Hive. It's basically just a little group we have going in which various members will talk about any shiny new thing that has piqued their interest. To be honest I'm the least degenerate one in the entire bunch. Perhaps I don't belong!
Queue imposter syndrome.
I very rarely listen to my fellow degen peers... and most of the time I wind up regretting it... like when they tell me to buy RUNE at 60 cents (now $7+) or CACAO at 10 cents (now $1+) and I just completely ignore them because I don't want to get involved in some crazy new thing. I very much like my BTC and Hive bags right where they are, thanks, but no thanks.
But Serai DEX is one I just can't ignore.
Not only can I not ignore it but I am also compelled to write this post just in case any of my followers want to participate in something brand new on the ground floor; something important.
Obviously getting involved with a brand new project is risky and that needs to be taken into consideration, but the potential reward (and contribution) on this one is far too great to ignore. We may find ourselves honor-bound to help something like this get off the ground because of how much value it provides to the greater ecosystem as a whole.
Soooo... what is it?
Like Maya DEX (CACAO token), Serai is pretty much a clone of Thorchain (RUNE token). The big big BIG difference here is that Serai is going to be listing the world's biggest privacy coin: Monero's XMR. In combination with Maya's planned listing of zCash this is turning into a very big deal. Privacy is a key component of any fungible and free-market ecosystem.
All three will be loosely linked together.
Thorchain already has a very strong listing and bridge into Maya. Maya will then create their own strong bridge into Serai. Using a good wallet like XDEFI combined with the proper frontend it will be trivially easy to bounce around any of these networks in a completely permissionless and borderless way.
Why is this important?
A while back Thorchain's most popular frontend came under a lot of fire from both sides when it acted as the middleman on the FTX hack that drained all the Ethereum from their coffers. This occurred AFTER the bankruptcy and shutdown of the entire platform, leading many to believe that it was an inside job (Sam Trabucco?) or North Korean hacker group Lazarus.
How FTX hacker’s $131m ‘laundering’ spree caused DeFi exchange to shut off
- THORSwap disables website interface after FTX hacker used exchange to swap stolen funds.
- The decentralised exchange says it took action after consulting with law enforcement.
- THORSwap contributor says exchange would be “open to referencing what other DEX interfaces in the industry have implemented,” to ensure compliance.
The interesting thing here is that so much scrutiny was being placed on a frontend called Thorswap rather than the Thorchain network itself.
Although this effectively prevents everyday users from interacting with THORSwap, those with sufficient technical ability can still use THORSwap by interacting directly with its smart contracts.
Yeah... or we can just build another frontend and host it in a part of the world that respects free-markets and the Wild West ecosystem.
Code is law?
Since the hacker started moving funds on September 30, they have sent around $131 million worth of Ether to Thorswap and privacy protocol Railgun
Others called the decision “disappointing” and questioned THORSwap’s commitment to creating an open and permissionless platform.
It's a good thing people are so ignorant.
Even people in crypto don't seem to understand the difference between Thorchain and Thorswap; habitually conflating them as the exact same entity. It's the equivalent difference between Hive and peakd/inleo/hive.blog/liketu/ecency/etc. Frontends are a single node controlled by a single entity (so far). The backend is where the real magic happens. It's good that the regulators do not understand this yet. How could they? Most crypto enthusiasts don't even understand it.
Circling back to Serai DEX
Allowing XMR to be traded on Serai is going to allow anyone on any platform even remotely connected to Serai to wash their money through a pretty much untraceable privacy coin. The best part? It won't even be happening on Thorchain.
Thorchain has stayed away from privacy listings for a reason (although they have considered it multiple times). By simply having a connection to Maya and Maya having a bridge into Serai it creates privacy, fungibility, and free-market design by proxy in a 3rd party capacity.
These Thorchain clones have an extremely easy time connecting to each other because the code is already built in to make it happen. In theory what happens on Serai is not the responsibility of Thorswap or Thorchain: go take it up with the Serai team directly.
The worst that can happen here is that a frontend like Thorswap will be forced to delist their connection to Maya or Serai due to the underground nature of the privacy listings. Again... that's fine... as the listing will still exist on the backend and can still be accessed in other ways. If there is demand to use those bridges people are going to figure it out real quick.
The worst thing about Monero XMR is that it works.
Many have claimed that XMR transactions can be traced... but the actions that regulators have taken against the coin scream differently. The reason why XMR gets delisted from every centralized exchange is obvious: it works. The reason why every three letter agency has talked about it is that it does exactly what it is supposed to do. Full stop.
Anyone who wants to participate with the launch of Serai without taking any underlying contract risks only has to do one thing and one thing only: buy Monero. I've been talking about the need for XMR to get a listing on a DEX like this for years, and it's finally happening. For the first time ever I will hold an XMR bag out of sheer principal.
But how to participate in the Serai airdrop?
I will have more information on this later in the month... but basically how it works is that we degenerates take our collateral and lock it into a contract that later becomes an LP. In my case I will "donate" something in the range of $1000-$5000 BTC to one of these contracts.
Then when the DEX launches they will match my contribution to the LP contract with some number of Serai tokens to create an LP. So if I put $5000 in the contract they'll match the other side with $5000 worth of Serai. There are rules in place that prevent me from taking my money out of the LP within a given timeframe.
These rules depend on how they are programmed. Maybe I have to hold the LP tokens for a year before I unstake them. Maybe if I want to unstake them early there is a penalty incurred. I have no idea what the specifics are yet, so stay tuned.
Obviously the risk here is that there's some kind of hack, exploit, or rugpull that results in infinity Serai tokens being minted and the complete loss of my BTC in the LP. Yes, that is a risk, which is why whatever I decide to put in this contract I'll be putting just as much or more into XMR itself without being exposed directly to this kind of attack vector.
Conclusion
Serai DEX was announced on Reddit on July 8th, 2022. From what I can tell so far it's a very serious project bringing a very serious need into the cryptosphere (decentralized high liquidity privacy token listings).
XMR has suffered and underperformed for years because the legacy system attacks it at every opportunity. This could finally be the XMR community's big break to bust out of the prison they've been in for all this time and offer their gift to the rest of the ecosystem. Serai DEX seems committed to making this happen.
The emergent DEX ecosystem is the ultimate dark-horse bull market narrative. While all these other degenerates are chasing memecoins and the empty promises of AI: a real foundation is being built right under everyone's noses. Anyone who want to be a part of this revolution at the ground floor should take note. More to come.