Exploring SwapSpace (Exchange Aggregator)
Aggregators on the internet have made our lives easier by placing all the various shopping and purchase options all in one place for easy comparison. One of the aggregators that I use quite often in my daily life is Skyscanner, which I use to book air travel when work groups require that I book my own travel and reimburse me later (I actually prefer it if they just do the booking themselves, as it reduces the amount of back and forth emailing...).
So, with the deluge of crypto exchanges (both centralised and decentralised) that now exist, the opportunity is there for an aggregator to take that coveted dominant space as market leader. SwapSpace appears to be a new competitor in the field, and I'm a bit curious to see what they offer that marks them out as being a worthwhile contestant in the race for dominance!
SwapSpace
So, what is SwapSpace trying to achieve that sets it apart from other established aggregators like OpenOcean? Well, after my little foray into the SwapSpace platform, it seems like SwapSpace is trying to integrate the best parts of an aggregator with the strengths of other platforms like LocalBitcoins and ShapeShift.
Other aggregators like OpenOcean do also incorporate centralised exchanges (CEX) like Binance into their list of comparisons, however, to use that aspect of the aggregator, you need to make an account. SwapSpace doesn't require an account, much like the ShapeShift of old. You send your crypto to a receiving address and specify an address where you want the exchanged funds to go and that is it. However, there is a bit of a notice from SwapSpace that if your transaction is flagged by the CEX as being suspicions you may need to submit to a selective KYC. However, in general it isn't required.... much like the sneakernet of LocalBitcoins
There is also the ability to swap easily from one crypto to another... even with some pretty exotic pairings. Of course, the exotic pairings will net you less choice than the more common ones, but the ability is there and more importantly, all the intermediary exchanges are abstracted away from the user making for a more pleasant experience.
So, an aggregator with a DEX/CEX integration and a bit of a privacy? Sounds good... let's try it out!
The Experience
So, let us try the whole experience through with a fairly common pairing, Ethereum (ETH) to Bitcoin (BTC). You probably have heard of these two cryptos... they are the current leaders and have been solidly reliable in the fast moving crypto timescales. Bitcoin as a sort of crypto reserve currency, and Ethereum as the oldest and most valuable smart contract blockchain. Who knows where things will go in the coming years... but these are the giants that are going to need to be pacified or integrated!
The quoted price is okay, it is roughly in line with the current market price on Binance and those reported on Coingecko. However, I do notice that there are many exchanges and DEXs that are listed that I have never used or heard of. So, there is an element of risk there, as I prefer to stick to the larger DEX/CEX ecosystem... and I'm not going to venture too far out for a 0.25-0.75 percent difference in the quoted exchange rate. Added to that, I was comparing the Binance quoted price against the current market price from SwapSpace and going directly to Binance (if you already have an account there) is going to give you a slightly better rate. Again, the difference is much less than a single percent (and possibly likely to take into withdrawal or on-chain fees) and with SwapSpace you are getting the advantage of having an account-less swap.
Something that bothered me a little bit was that there were the TrustScore being included along with the price listings. I've been a long time user of Binance and have never had any problems (yet...), but I know that other people have... however, I do wonder how Binance scores only 2 stars on TrustPilot whilst exchanges that are relatively unknown manage to rack up some pretty impressive 4-5 star scores. I know that users of SwapSpace need some way to compare the reliability of exchanges... but I'm not sure that this is a good one! I would suggest that the reliability scores from a crypto-focussed site like CoinGecko might be more in line with actual expectations and usage.
For reference,Binance has a trust score of 10 from CoinGecko, whilst all the other exchanges on the page are not even listed. So, that doesn't exactly put me at ease there!
Anyway, moving on... after selecting the amount and types of assets that you want swap, you need to select the return address for which your crypto will be returned. It is a small thing, but something that is often overlooked but much appreciated, but SwapSpace does check that the format of the addresses is at least correct. However, that doesn't stop people making mistakes in address or chains that share the same format (it seems like that happens quite a bit if you hang out in enough Telegram support channels...).
Also much appreciated is the Trezor hardware wallet integration... although, Ledger and other hardware integration would also be very nice!
You are then directed to deposit the funds to a deposit address which will be watching for your transfer. This is quite a familiar process for those who used ShapeShift in the early days. It is quite disconcerting to send your funds off... and hoping that your trust was well placed. But after doing it a couple of times, you do start to gain trust in the system.... but the risk is always there. After all, you are trusting a third-party to complete the exchange for you, and that always carries an element of risk.
The deposit address will be watched for about 24 hours for your to make the transfer, after which your exchange request lapses. I do wonder how they would handle the large fluctuations in that time period... after all, 24 hours is an eternity in our little space! I'm afraid I wasn't brave enough to try that out....
I was hoping that there would be some sort of dedicated address that would handle the exchange, but it appears that the address that I was directed was a bit a of a busy one. It is hard to know exactly what it is... maybe the wallet address of Swapspace on the selected exchange? The main thing is that you won't be the only person depositing into and out of it... which is either a good or bad thing depending on your own use profile.
Conclusion
So, SwapSpace is a DEX/CEX aggregator that seems to try and recapture some of the ideals of the old LocalBitcoins and Shapeshift but allowing for account-less swaps. It does operate in a bit of a gray zone for that, as it does state that selected KYC can be administered if they are required to do so by the exchanges.
From the point of view of pure aggregation, I'm afraid that the differences between the multitude of DEX/CEX exchange rates in the common pairings is pretty small due to high speed bot arbitrage. Unless you are transmitting giant amounts, a small difference in percentage (less than one...) isn't really going to make a big difference. In the past, there did exist a "Kimchi" premium... but that seems to not be something that you can tap into here... I haven't even checked to see if it still exists! However, there is the semi-privacy angle which might be highly valued by some users.
Where SwapSpace does shine is in highlighting the exotic pairings that aren't available on OpenOcean. I personally don't have much reason to change between exotic pairings myself, but I could imagine that there are people who would definitely be interested in trying their hand at manual arbitrage, but I suspect that those who use bot arbitrage are finding more up-to-date information...
So, SwapSpace targets a pretty specific type of user... perhaps one that is looking for the best deal on a particular pairing, but doesn't want run through the trouble of setting up various accounts across a million exchanges that they might just use once... and potentially deal with a multitude of KYC requests from small exchanges that might not have a good data protection policy. This is a project that revives some of the ideals from the early days of cryptocurrency. I wish them the best of luck, but I do wonder if the whole space has moved on from those early days?
Handy Crypto Tools
Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
Kucoin: My second choice in exchanges, many tokens listed here that you can't get on Binance!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
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