The Nash Exchange launched on mainnet one year ago on 9 September. The first version of our second-layer exchange proved the viability of our core technology: cross-chain state channels that enable high-performance non-custodial markets.
Since then, Nash has continued to refine our product and roll out unique features that no other exchange can boast. These include:
- Non-custodial Bitcoin trading on fast, liquid markets with order books.
- Decentralized API keys based on secure multi-party computation (MPC).
- Industry-leading order placement and cancelation times under 20ms.
Taken together, our non-custodial state channels and MPC-powered APIs give Nash a security profile that has never been seen before in the trading industry. Funds are not at risk, even if both your and our servers are compromised.
As well as being one of the safest exchanges, Nash can also claim to be the fastest non-custodial exchange – the only one capable of rivalling the speeds of centralized services.
This post provides an overview of our main achievements during just one year of live operations and offers a preview of what’s in store for the near future.
State channels and steady iteration
When Nash launched its exchange on mainnet on 9 September 2019, we provided non-custodial cross-chain trading between the Ethereum and NEO blockchains. This initial version of our product proved the viability of our core technology. This was the first time in the crypto space that high-performance markets with order books were implemented directly across different blockchains.
The Nash solution, which is explained more fully here, is effectively a multi-chain second-layer network. Our exchange matching engine manages the balances of state channels on multiple blockchains, updating these as trades are made and writing back to the blockchain only periodically. This overcomes speed bottlenecks around settlement, as well as the issue of blockchain compatibility.
Since all transactions, including trade orders, must be signed with a user’s cryptographic signature, Nash’s system never lets us take control of user funds.
The first version of our exchange was a necessary step for future iterations. Having proven that our basic technology was viable, Nash was able to go about refining aspects of the platform UI and adding further features in response to user requirements.
Nash has always followed this empirical, data-driven approach to achieving product/market fit, and the “Minimum Viable Product” (MVP) version of the exchange has been an essential starting point. Obtaining real user data as soon as possible was a huge advantage in directing development over the year.
You can learn more about Nash’s approach to product development by listening to episode two of our podcast, Beyond the Chain. Here, Nash co-founder Fabio Canesin discusses the benefits of the MVP and testing approach with Jeff Bussgang, a lecturer at Harvard Business School and founding partner of the venture capital fund Flybridge.
World first: Non-custodial Bitcoin order books
Integrating Bitcoin into our state channel system was a priority from the start, and we succeeded in early 2020!
Until now, Bitcoin traders have had to sacrifice security and custody over their assets in order to enjoy the performance of centralized exchanges. Bitcoin has proven especially difficult for decentralized exchanges to integrate, since it does not offer full smart contract support.
Some decentralized exchanges (DEXes) have integrated Bitcoin through “token wrapping”, letting users trade “wrapped Bitcoin” (wBTC) – an ERC-20 token on the Ethereum chain – against other ETH-based tokens. This approach is essentially custodial, however, because a user’s real Bitcoin is held by a custodian while they trade wBTC. What’s more, it doesn’t overcome the more general limitations of DEXes.
Other exchanges have employed “atomic swaps” as a genuinely non-custodial solution. However, atomic swaps require the constant monitoring of two blockchains. Not only are they too slow to scale, but they are inherently incompatible with order book–based markets. Orders placed above or below the current price level constitute most of the volume on a large exchange.
Nash’s solution for Bitcoin, which is compatible with our multi-chain state channel system and matching engine, provides optimal non-custodial properties for funds in channels and best-in-class security for funds in open orders.
For the first time, this enabled real non-custodial Bitcoin trading on markets that use order books – with all the performance that Nash’s off-chain matching engine can offer!
You can learn more about Nash’s state-channel solution and Bitcoin protocol by listening to episode three of our Beyond the Chain podcast, featuring Nash co-founder Thomas Saunders and backend engineer Jan Huwald, who work together on our Settlement and Funds team.
World first: Decentralized API keys
Nash aims to be attractive to enterprise traders who rely on algorithms and API keys to place orders. To offer the kind of security protections institutional traders need in a non-custodial environment, Nash implemented decentralized API keys based on secure multi-party computation (MPC) – another world first!
A major disadvantage of other decentralized exchanges is that they sign blockchain transactions with a user’s private key. This key is sufficient to do anything with all the assets in an account. Any amount can be sent to any address.
Not only is placing a private key on a server for running a bot a huge security risk, but this approach is incompatible with traditional institutional setups, where individual traders are all given their own API key with specific limits attached.
Centralized exchanges can generate individual API keys with their own security policies easily – but of course, they are custodial solutions.
Thanks to MPC, Nash can achieve the same thing in a non-custodial manner.
MPC lets Nash split the generation of a blockchain signature between two parties: us and the user. Neither party can sign a transaction alone, and the user can specify particular conditions for each API key, such as an address whitelist. Nash can then enforce a security policy: if anyone tries to use the key to withdraw to an address not on the whitelist, Nash will simply refuse to sign the transaction.
Our decentralized API keys offer the same functionality as API keys on a centralized exchange, but without taking custody of users’ assets. What’s more, the combination of non-custodial state channels and MPC-powered APIs gives Nash a security profile that has never been seen before in the trading industry. Funds are not at risk, even if both your and our servers are compromised!
In the first episode of our Beyond the Chain podcast, you can hear about our revolutionary APIs directly from the team who designed and implemented them – Nash co-founder Ethan Fast and applied cryptographer Robert Annessi.
Nash is currently looking to extend MPC functionality to all areas of our exchange, offering hardware-grade security for everyday traders and holders at absolutely no cost.
Nash is by far the fastest non-custodial exchange
Nash’s unique non-custodial architecture frees our matching engine from the speed restrictions of the blockchain. Our engineers have been able to carry out multiple optimizations to our communications layer and as a result have achieved an industry-leading latency of <20ms!
This easily makes Nash the fastest non-custodial exchange, offering the ability to place and cancel orders in under 20ms. Order placement speed is crucial for algorithmic traders and market makers, who constantly update their live orders in response to changes in the order book.
Don’t trust, verify! The Nash protocol and client are open source.
All this bleeding-edge innovation can sometimes look like magic in our industry, so in another push for transparency, Nash has open sourced our MVP protocol and client SDK. This allows anyone to build upon our system, providing third-party interfaces. More importantly, it lets anyone verify Nash’s claim to be non-custodial and see that user keys and knowledge are never at risk.
Don’t forget: It’s all on mobile!
It’s always been our goal to have a feature-complete mobile app, offering the same functionality as the Nash web platform.
The first version of our mobile app served as a tool for completing KYC verification for high-volume users in under five minutes.
During the year since launch, our mobile team has continually expanded the app, which now includes a simplified trading interface, as well as full transfer and funds management functionality.
What’s next for Nash?
Nash has shipped the above features in just one year of live operations, achieving multiple world firsts and industry-leading speed.
With all core functionality in place, Nash is primed for growth – and development speed is only increasing.
Here are some of the features we’re currently working on, which we expect to ship in the near future:
- Nash Cash: Get in and out with no network fees!
Our own fiat ramp solution will launch soon in Europe, offering a 0% transaction fee with SEPA transfers. Purchases and sales are connected directly with our non-custodial state channels, meaning you can invest, trade and cash out gains without ever having to pay blockchain network fees. Of course, unlike a centralized exchange, Nash never takes control of your funds – purchased assets go directly to a user’s state channel balance, ready to trade.
- MPC all the way down
Nash is currently expanding the revolutionary technology behind our decentralized API keys to all areas of our platform, making it the norm for everyday users and providing hardware-level security for personal wallets. You’ll be able to set address whitelists and transfer limits directly within our platform UI.
- Full trading experience on mobile
Our mobile app will offer the ability to place stop and limit orders, not just swap assets at market price. In combination with Nash Cash and NEX staking on mobile, this will make the full set of Nash features available any time, anywhere.
- New chains and pairs
While Nash already offers the markets that dominate cryptocurrency trading (Bitcoin and Ethereum pairs with stablecoins), we will be integrating other chains. Elrond (EGLD), a new chain with unique scaling technology, will be joined by the most popular Bitcoin forks, for which we can adapt our existing BTC solution: Litecoin, Bitcoin Cash and Dogecoin.
- Improved liquidity
Nash recently launched our Paid Market Makers program and is already striking new deals. The effect of additional capital deployed on our order books should be visible soon.
- Zero-ETH withdrawals on Ethereum
We are working on a next-generation implementation for our channels on the Ethereum network, solving one of the major pain points for users: the capacity to withdraw assets from state channels without having ETH in their personal wallet to pay network fees. The new implementation will allow for withdrawal fees to be deducted directly from the channel balance.
- Price alert push notifications
You’ll be able to set custom notification preferences for a variety of events, including deposits, withdrawals, NEX stakes and successful orders on the exchange – as well as price alerts.
- Nash Savings: A new DeFi product
Nash isn’t just for traders but for holders as well! Besides extending our MPC technology to offer the safest multi-chain wallet – at no cost – we are developing a DeFi product to let investors put their capital to work in a non-custodial environment. Expect attractive APRs combined with a simple, intuitive user experience, making DeFi accessible to everyone.
- Integrations with industry-leading offerings
Nash has worked over the past year to establish the relationships and develop the requirements to integrate our second-layer solution with the leading CeFi offerings. This will provide a natural progression for users of wallets and bots, as well as brokerage firms, to join the non-custodial world of DeFi – without giving up the features and services they rely on.
With our new Affiliates program up and running, there’s never been a better time to spread the word about Nash!
You can stay up to date with Nash by following our Twitter and Instagram, as well as joining our official Telegram group. We also encourage all Nash Exchange token (NEX) holders to join our community platform, where they can talk directly with the team and receive reliable answers to questions.