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The Decentralized Derivatives Exchange with Cross-Chain Trading Technology.

Serum (SRM) Fact Sheet

Serum is essentially a decentralized derivatives exchange that was specifically created with the main goal in mind of enabling cross-chain trading of cryptocurrencies.
The project was developed through a collaboration with the centralized derivatives platform known as FTX as well as the Solana (SOL) blockchain.
The main way through which the governance process is handled on top of Serum is through the SRM governance token, which is also responsible for the process of rewarding network participants.
A MegaSerum Token (MSRM) is equal to 1 million SRM tokens, which is the amount required to participate within the network as a staking node operator alongside 9 million SRM tokens (A total of 10 million SRM), which can contribute toward network decentralization and offers support in transaction settlement validation.

What is Serum (SRM)?

Serum (SRM) is essentially a decentralized exchange (DEX) project that is purpose-built to enable cross-chain trading with a high level of speed and efficiency that can even rival centralized exchanges that are its competition. This is mainly due to the fact that it runs on top of the Solana (SOL) blockchain. However, it is also fully interoperable with Ethereum (ETH) as well as Bitcoin (BTC), which makes it a cross-chain DEX.

Serum as a project was originally launched in August 2020 and was one of the first open-source projects that got built on top of the Solana blockchain.

Furthermore, this is a project that is fully supported by the Serum Foundation and is backed by FTX, Alameda Research, as well as the Solana Foundation. In fact, the same team that contributed to building the FTX derivatives and centralized exchange was the team behind the development of Serum.

How is Serum (SRM) Used?

Serum is utilized to power a decentralized exchange (DEX) ecosystem that is quick and supports a multitude of blockchains and stablecoins, and even supports order books as well as wrapped cryptocurrencies.

Most Decentralized Finance (DeFi) systems are based on smart contracts. However, these can potentially be exploited and have their funds stolen. Furthermore, these platforms interact with the traditional world of trading by leveraging the power of centralized oracles and providing them with the price feeds they need to function properly.

Serum tries to combat this by making everything decentralized. Furthermore, due to the fact that it is built on top of Solana, it can, theoretically, reach 710,000 transactions per second (TPS), which is far beyond Ethereum’s 15 to 30 TPS at the current point in time.

By design, the Serum network is meant to facilitate transactions in a way that is similar to traditional exchanges; however, by being directly integrated with Solana, it benefits from its high speed, low costs, and efficient transactions, all of which allow them to get settled on top of the blockchain.

Use-Cases of Serum (SRM)

There are numerous use cases found within the Serum (SRM) DEX. When we take a look at traditional exchanges, order books are essentially a list of buy and sell orders, which are organized by price levels, after which they are maintained by an entity that is centralized. However, Serum differentiates itself by having this process automated and on-chain, by matching the buyers and the sellers, which is directly based on their orders.

Furthermore, unlike automated market-making (AMM) models, where the traders buy and sell cryptocurrencies from the liquidity pools, Serum, again, differentiates itself by providing its participants with full control over their orders. This means that every person who is a part of the network is provided with the opportunity to essentially pick a value that they would like to buy and sell their assets for and the ability to pick any order size that they feel comfortable with without being limited in any way.

Alongside all of this, there is a fee that is associated and connected with each trade, which is denominated within the SRM cryptocurrency.

Another interesting feature of Serum is the fact that it has the ability to bring cross-chain swaps to its exchange, and this, in turn, allows any participant to trade tokens that already exist on top of other platforms.

What this means is that through the utilization of the cross-chain exchange for Ethereum (ETH) tokens that follow the ERC-20 token standard, the mechanism occurs at a point in time when both parties send ETH to a specific smart contract that serves the role of collateral. At the point in time when the sender ends up sending their cryptocurrencies to the receiver, in exchange for another token, both of them will receive their ETH collateral back upon a successful transaction.

However, whenever a dispute ends up occurring, the smart contract, which is responsible for the process of holding the collateral, can then determine who is in the right by checking the underlying blockchain.

The smart contract has the ability to send the assets back to the person who is correct and provide them with an additional portion of the other person's collateral as a means of incentivizing all of the parties to behave.

Usability & Primary Features of Serum (SRM)

Serum has a native cryptocurrency that features a high level of utility associated with it, and this is known as the SRM token. This cryptocurrency gets its value from its overall utility on top of the network.

This occurs due to the fact that it is a form of payment for the transfer of fees on top of the network, and each participant that utilizes the Serum solution can spend their SRM balance as a means of enabling a reduction in fees on top of the exchange.

However, there is another feature that makes this cryptocurrency and overall DEX stand out, and this is due to the fact that it introduced the MegaSerum Token (MSRM).

MSRM is unique in the fact that it enables participants within the network to gain it at the point in time when they lock 1 million SRM, which aids them in receiving higher rewards than 1 million SRM would if they were individually held.

Protocol

If someone wants to operate a blockchain node on top of the Serum network, after which they would be provided with the opportunity to supply the blockchain history for any cross-chain settlement validation that occurs on top of the network, they need to stake a minimum of 10 million SRM, where all of the nodes needs to have at least one MSRM as a part of that total.

If users do not want to operate as a node but have the main intention of receiving staking rewards, they are also provided with an opportunity to essentially delegate their SRM holdings to any other node operator, after which they can unlock a portion of the staking rewards.

Ledger

Serum (SRM) is based on top of the Solana (SOL) blockchain and leverages all of its unique properties and benefits as a means of operating quickly, efficiently, and with low fees.

However, due to the fact that Serum is a DEX that is fully distributed, it has no single point of failure as it is not centralized in any way.

Due to its connection with Solana, Serum is a unique DE that allows for the decentralization of all of the exchanges on top of numerous blockchains, alongside a unique on-chain order book, speed, and efficiency, all of which are fused together with low transaction fees.

Furthermore, Solana is also reliant on the interoperability between blockchains and is fully compatible with Ethereum (ETH) and Bitcoin (BTC). This benefits Serum and enables the collaboration for cryptocurrencies that would otherwise not be compatible with the network, where they become fully exchangeable through the Serum DEX.

Smart-Contract Support

Due to the fact that it leverages Solana's virtual machine, the Serum DEX has full access to the procedure of executing smart contracts. Furthermore, Serum is also able to support smart contracts by utilizing its Ethereum interoperability.

Solana’s Low-Level Virtual Machine was specifically created by its development team, not by Serum, and brings a high level of utility to the SRM cryptocurrency.

Tokenomics & Supply Distribution

There are two main tokens that make up the Serum DEX. These include Serum (SRM) and MegaSerum (MSRM).

Serum is the utility and governance token of Serum, and if anyone holds SRM in their cryptocurrency wallet, they can receive a discount on the fees. SRM is native to the Solana blockchain as an SPL token. However, it is also available on the Ethereum blockchain as an ERC-20 token.

MegaSerum (MSRM) is 1,000,000 SRM tokens that are stacked together. Anyone can create 1 MSRM by locking up 1 million SRM. There is a limit of 1,000 MSRM, making them scarce in practice.

Based on Serum's official documentation, the tokenomics surrounding SRM specifically are distributed as follows:

At the point of launch, 10% of all SRM tokens began getting unlocked.

The other 90% had the same unlock schedule. These tokens were fully locked for the first year and began unlocking linearly over the span of the following six years.

This began on August 11, 2021, at approximately 1/2190 per day. All of the seed sales were locked.

With that in mind, the supply of SRM is limited to 10,000,000,000 SRM.

Team & History

To get a perspective on the overall development and history of Serum, we first need to look at Sam Bankman-Fried and FTX.

Sam Bankman-Fried began as an investment banker and financial adviser at Jane Street Capital. However, in 2017, he launched Alameda Research, which is a company that specializes in providing liquidity and managing digital assets for both individuals as well as institutional investors.

However, in 2019, he, alongside Alameda Research, launched the centralized cryptocurrency derivatives exchange FTX, which was launched with an investment from the Binance Exchange and quickly became one of the largest trading platforms on a global scale.

Serum was then launched in August 2020 as a decentralized exchange that allows users to buy, sell, and exchange cryptocurrencies without involving a central database.

This means that Serum was co-founded by Sam Bankman-Fried, the CEO of the FTX exchange, and developed by the same team that worked on FTX.

Serum was created by a consortium of partners, including FTX, Alameda Research, and the Solana Foundation, and its development is currently supported by the Serum Foundation, which is backed by a group of experts in cryptocurrency, trading, and decentralized finance.

Activities & Community

Looking at how its performance on the Official Project Serum Twitter page looks like, Serum has over 4,000 followers, indicating a healthy and active community.

When we go over Project Serum’s Official Telegram Page, we can see that it has over 6,300 members.

Development Activity and GitHub Repositories

When we go over its development, we need to take a look at the Project Serum Official GitHub Page.

Here, there are numerous popular repositories, split across:

Serum-dex - Project Serum Rust Monorepo
Serum-dex-ui - Example Implementation of a UI for the Serum DEX
Swap-ui - React Component for Swapping on the Serum DEX
Serum-ts - Project Serum TypeScript monorepo
Swap - Swap on the Serum Order Book

On-Chain Activity

When we go over its on-chain activity, it is clear that Serum functions both on top of Solana as well as Ethereum.

As such, we will be utilizing the Solana Explorer, as well as Etherscan, to get the data surrounding its on-chain activity, as it's a cross-chain DEX, and this way, we can have information surrounding both sides of the equation.

There is also a fixed supply of 9,992,475,558.047953 SRM.

When we go over Etherscan, we can see that SRM has a maximum total supply of 261,000,003 SRM. There are a total of 17,700 holders of the cryptocurrency, as well as 551,891 transfers.

Source: Etherscan

Activities and Partners

Due to the fact that Serum (SRM) has experienced a high level of growth within the crypto space, it has experienced a lot of partnerships, as well as collaborations and integrations. Some of the most notable ones include:

Magic Eden - Serum has partnered with Magic Eden to power the SFT marketplace for Genopets with its Asset Agnostic Orderbook.
Vybe DEX - The Serum Community announced the launch of Vybe DEX, which is a data-driven trading interface that is powered by Serum’s Central Limit Order Book and Matching Engine, which is built and hosted by the Vybe Network.
FRAKT - Serum partnered with FRAKT as a means of aiding it in building a non-fungible token (NFT), decentralized finance (DeFi) ecosystem for NFT collectors, investors, and creators.

References & Reports

References

Market Research

Solana Explorer (BETA)
Etherscan