Not only EtherMium offers a high-performance matching engine, but it also provides an aggregated orderbook containing liquidity from top crypto exchanges like Binance, OKEx, and Huobi. This means that you can safely trade external order books through EtherMium without the risk of keeping your money on a centralized exchange.
How does it work?
Our system posts orders from external exchanges to EtherMium order books to provide liquidity for our customers. When a customer order hits an external order, our system instantly executes the order on the external exchange and brings the purchased tokens to EtherMium. Due to the nature of cryptocurrencies, these operations take minutes to get completed.
What does it mean for you?
It means that you can trade your tokens against an aggregated order book containing orders from the most popular and most liquid cryptocurrency exchanges without the risks associated with keeping your funds on a centralized exchange.
How do we mitigate the risks associated with interacting with centralized platforms?
We have devised a system that minimizes our exposure to the centralized exchanges. The speed and programmable nature of cryptocurrencies allow us to instantly deposit and withdraw funds from centralized exchanges and use only a small amount of money to execute large trades.
For example, if you place a buy order for a token of 100 ETH in value, and the order executes against an order from Binance, the system will instantly purchase the amount on Binance, bring to EtherMium and execute your EtherMium trade on the blockchain. The only drawback is that it can take several minutes for your order to get confirmed on the blockchain before you will be able to withdraw the funds to your wallet.
If you would place an order of 1000 ETH and we would only have 100 ETH on balance on Binance, your order will trade against ten smaller orders of 100 ETH each that would be executed one by one.
How do we deal with the risks of slippage?
External orders posted on EtherMium have their price include exchange fees, transfer fees, a slippage fee (a small percent to mitigate cases of slippage) plus a small service fee to mitigate the risks of dealing with centralized exchanges. While this fact slightly worsens the price that you would otherwise get by trading directly on the centralized exchange, you, however, are exposed to multiple order books which makes sure that your order is traded at the best price across various exchanges. Your order will trade partially on one exchange and partially on another if it hits orders from different exchanges, this would in most cases offer a better overall result for your trade. Combine that with the risk-free nature of EtherMium, and you have an excellent deal.
The bottom line
You can trade risk-free, against an aggregated order book of top crypto exchanges. The smart contract manages your balances and does not allow your balances to change unless you receive the ordered token in return. So the only risk you as a customer face is that your order will not execute due to some glitch in our system. In this case, you will remain with your balance. However while this situation is possible, it is in our best interest to execute all orders as any non-execution would make us lose the service fee associated with completing your orders on external exchanges and place a reputational cost on our platform.
We believe this to be a temporary measure to provide the necessary liquidity while EtherMium gains in popularity and customers start performing their trades more and more directly on EtherMium. Your orders will be executed against the best available price in the order book at the moment of the trade, and with time more and more orders on the order book will be orders from other EtherMium users. For the time being, you can enjoy the best liquidity available in an entirely safe way.