What is a cool cryptocurrency without the exchange to trade it on? Yeah, I don’t think we have an answer to that one either. For the very cool Ethereum, the equally cool EtherDelta arose. You are probably aware that there is more than one exchange out there. So, before deciding this is THE platform for you, we figured an in-depth analysis and review were in order.
It’s a big decision to decide where you will trade your money. But Ether way, (see what we did there?) we thought it might help to know just how this exchange compares to the rest.
The Etherdelta Exchange
As we mentioned, the Etherdelta exchange is exactly what you’d expect: an exchange crafted specifically for the Ethereum Network and the coins that use it. But more important than the what is the who. This who just happens to be the founder Zachary Coburn. Zachary founded this company in 2016. According to Crunchbase, the company is now operating out of Chicago, Illinois.
Like anything on the blockchain we would expect that the platform is as fully decentralized as possible. So you are probably not surprised that this is the case. You might even hear the term “DEX” (Decentralized Exchange) thrown around in reference to it. For those who need a little refresh, decentralization means that we trust the power of the crowd to maintain the security of our funds. We don’t trust a single authority to monitor our trades. The exchange also relies on another popular blockchain term: the smart contract. With the exchange leveraging these contracts for deposits, withdraws and exchanges, we can rest assured that the security of the platform is intact.
How to use Etherdelta
Here is where there has been some confusion from the crypto community. So let’s walk you through the actual use of this platform. But first things first, long before you actually start setting up an account you will need an Ethereum compatible wallet. Once this is uploaded and synced to Etherdelta you will be ready to get started.
Open an Account
To start a new account you will first have to navigate to your top right and select the account button. From there, you will select “New Account”. This will open a page that looks something like this.
You will then be prompted with both public and private key. These will appear as two long combinations of numbers and letters. Storing these is of the utmost importance as this is what ensures your security. This can be done in a number of ways including encrypting your key or keeping a paper copy that you can hide in your mattress (or any other safe place of your choice).
Adding your Funds
Now that you have your account created, we get to the most difficult part of this whole process. Remember that wallet we previously mentioned?
You will need to send the amount you want to use on the platform to your public key. Once this is safely stored you are ready to transfer coins into your EtherDelta smart contract. Using the first section, you will notice three separate columns. With the column labeled “Deposit” you will be transferring coins from your personal wallet to the exchange. Once you have completed this action, an address will be displayed that will help you track your transaction. After hitting the deposit button, these funds will then be moved to the “Ether Delta” box. This will not be completed until your transaction is verified.
Do not get frustrated if this process takes you awhile. This is completely normal due to the nature of the platform. It is also recommended in your frustration you do not clear your browser history as this may cause you to lose any funds that are not secured in your wallet. With these cautions in mind, you are well on your way to making your first trade.
Making the Exchange
You might notice that in the far right column that there are numbers colored in red or green. As you might have guessed, orders to make a purchase are green and orders to make a sale are red.
From this list, you have two options. You might decide you want to accept the orders posted or you might post a price at which you will be willing to conduct a trade. Keep in mind these prices are in Ethereum not in your country’s currency. This might just slightly sway your decision in one direction.
The Etherdelta Review
The number of available exchange platforms are many and relatively similar in their capabilities. While capabilities may be shared amongst each platform, there are some interesting features that set each platform apart. To determine if these features are enough to convince us to make the switch we conducted a very careful review.
In addition to considering some of the standard features such as fees and coin availability, we also wanted to consider the platform’s user interface, reputation, management, anonymity, reliability, and some other additional features.
As you may have noticed from our (not so) high-quality screenshot, you might agree with the masses when it comes to the interface being a little hard to navigate and even ugly. That said, the interface is one of much potential when it comes to trading. While reviews don’t lie, you might notice that miss-reading or miss-typing orders is not uncommon. When it comes to money, this is something we would like to see managed with strong accuracy.
Once you get past this slight learning curve, we know you will be well on your way to deal enjoy the bonuses from using this platform. Keep in mind that since the platform is not very intuitive, you must first transfer funds from your own personal wallet to an exchange wallet.
After passing this learning curve, many more experienced users actually like the layout of this platform since you can see your entire dashboard without scrolling, or clicking or searching through anything. This makes the process somewhat more efficient.
On the contrary, users have decided that they like that there is no verification process required to open an account or start trading. This means that you can get started on EtherDelta quite quickly.
Of course, this no verification is not uncommon in the industry and is typically only revolutionary when compared with a centralized exchange. This is so that these exchanges are run in line with local laws. Having to include personal information when creating an account is not ideal, especially since in the event of a hack there is lots of data at stake.
Maker vs. Taker Fees
Like anything, we’d like to know how much things are going to cost us. To properly analyze this we must first take into account that there are both maker and taker fees. If you are a maker, you are attempting to improve the liquidity of the crypto in question by requesting to buy or sell at a certain price. This is a price that there are currently no available buyers or sellers. Therefore, you will have to wait until another trader agrees to your price. When a trade is finally found and executes on this trade, they will be charged a maker fee which is usually 0.1% (not very big).
Where there are makers there are takers. Takers will attempt to make a trade at whatever the prevailing market price is. It is interesting to note that when these trades are executed, a taker is charged a taker fee. This fee is typically larger than the maker fee since it is more convenient to accept a price rather than set one.
Why did we go through this whole explanation? We’re getting there. The trading fees on the exchange might be a slight deterrent for some users at 0.30%. This is 0.05% higher than the industry average of 0.25% for Ethereum exchanges. This is the taker fee. If you happen to be a maker, you are actually charged NO FEE AT ALL. The platform is believed to experience greater liquidity as a result.
The Gas Fee
In reference to fees, you might also hear a term thrown around, known as gas fees. This gas fee is essentially a fee that goes to Ethereum miners. So anytime that you would require a transaction on the Ethereum network you will be subject to their 0.3% fee. That said, while you might be paying this gas fee you will likely not have to pay anything in terms of a platform fee.
When you are depositing or placing an order a post on Reddit shows this is free. However, if you want to withdraw Ethereum a 0.0007 ETH (or approximately USD 0.17) fee will be in order. The only exception is the one we considered previously, which is the 0.30% taker fee.
As we previously touched on, this coin has a reputation for providing just about any and all ERC20 coins that you can think of. Owners of these coins will typically select Etherdelta is the place to first list their coins. These coins will then often be only available on this platform. This is a great factor to consider, as in addition to this coin being available to those who missed the initial ICO, it also could give you a leg up on others. Why do we say this? If you happen to know about a coin before it hits the Bitrex’s of the world you may just have an advantage price-wise. Why? You are getting in from the get-go, meaning you might see slightly lower prices prior to your coin hitting the big leagues.
Perhaps, you don’t quite see a coin you like. This isn’t a problem! Etherdelta has so many coins available since users also have the ability to add new tokens to the site by providing the details for the coin (or token) they are looking for. This could be great news if you want to create a new cryptocurrency on the Ethereum network.
This also means that all coins on Etherdelta will abide by the functions of the ethereum network. If these coins failed to include these terms in their smart contract they would not be considered ERC20 coins and would not be available. It is also important to note that only cryptocurrencies can be traded amongst cryptocurrencies. That means that you will not be able to trade your company’s prevailing currencies for any sort of crypto. This differs greatly from leaders like Binance, who now offer fiat-to-crypto trading.
Theoretically, with all of the security measures in place, we would expect EtherDelta to have a reputation to match. In December 2017, the site was subject to a phishing attack that resulted in a loss of $244,000 at the time of the attack. Arguably the attack would have likely been a lot worse had the funds been on a centralized platform. That said, those who had their fund stolen might be a little hesitant to keep trading.
November 2018, also proved to be an interesting date for the books as the SEC had just settled a lawsuit that was issued against the EtherDelta founder. It was at this time that many had begun to question the legitimacy of the exchange since the lawsuit was for “operating an unregistered exchange”. We still don’t know whether this lawsuit had a strong basis. What we do know is that Zachary Coburn did decide to settle with the SEC through a large monetary payment.
The Help Line
For those who are seeking help, your options are limited. Other than reaching out to the community, the actual team working with the exchange is the small meaning you will be contacting one of the few team members that works with the exchange. This might not be the best use of our time since we are confident that these are probably pretty busy people. We should expect that customer support is limited after all this is a decentralized exchange that seeks to operate without any main authority figures.
That said, the community is small but welcoming and support chats such as their Reddit group might be able to give you the help that you need.
We also must take into account the management and more specifically the change of management that took place. Since the cryptocurrency is only as good as its people. With a change in management, we can’t say the same reputation will hold. Many continue to report lost funds and with the change in management, many have connected these two dots. That said, there is no proof that this change has resulted in anything other than the change in fee structure.
Another dot that has been connected is the substantially lower trading volume that was evident after management changed.
For on-the-go traders, you might have a slightly more difficult time trading. There currently is no version of EtherDelta that can be run as an app on your phone. The exchange itself is small and there has been little talk of app development.
While we like this possibility, remember that apps typically offer less security so in this case, it is clear to see which aspects we selected over others.
When it comes to the question of reliability, there really is no simple answer. We can say this since Etherdelta is based on the Ethereum network. This means trades and efficiency are reliant on a single network. So when times are good they are good, but when they aren’t well that’s when the reliability comes into question.
That said, we can’t rely on any trade for being quick. After all, in any decentralized exchange, you have to wait for the masses to approve the trade. As the nature of the decentralized concept, this is normal and only faces criticisms for it’s lower liquidity than some of the more popular exchanges. However, Etherdelta has made attempts to mitigate this through a no-fee model on certain trades.
This also means that when the Ethereum network is down the platform might be in jeopardy. If the network is down or running slower than usual, you’ll have to expect the same will be found on EtherDelta.
A Final Word
While we can’t advise you one way or another we will say it is important you understand exactly what you are doing. Those that have left positive reviews tend to be a little more involved in the community, which means for those who are more on the amateur side you might have some learnings to go.
The lack of user-friendliness could make for some not so pleasant mistakes that may end up costing you. So if you decide this is for you, a quick review of how to use EtherDelta should be on the checklist. For those able to get past this, many commend Etherdelta for its use of smart contracts which give users more security than comparable exchanges.
Finally, we’d advise you to consult the local jurisdiction in your area. While the company itself does not prohibit the use of its platform by those in certain areas of the world that does not mean your country’s laws don’t.