How does the Ethereum IDEX exchange work?

[amara]

IDEX decentralized exchange platform consists of a smart contract, a trading engine, and a transaction processing arbiter. The smart contract is responsible for trustlessly and secure storing of all crypto assets and executing trade settlement, and all trades must be authorized by the user’s private keys.

However, unlike other decentralized exchanges, the IDEX smart contract is designed to provide high security in crypto trading such that only the exchange is authorized to submit signed trades to Ethereum. This enables IDEX to control the order in which transactions are processed, separating the act of trading from final settlement. As users trade their exchange balances are updated in real-time, while simultaneously used their private keys to authorize the crypto trades in the smart contract. This authorization prevents users from rescinding any completed trades, and prevents IDEX from initiating any unauthorized trades.

Authorized transactions are passed to the arbiter which manages the queue of pending transactions, dispatching them in sequence to ensure that each crypto trade is mined in the correct order and that the smart contract balances stay in synch with the exchange balances. By controlling this transaction sequence, IDEX decentralized exchange platform provides the high speed, top performance and user experience of centralized exchanges which are combined with the security and auditability of decentralized exchanges.

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[williamshennie9]

It seems like a lot of these "smart contracts" are popping up in various forms these days. I think the crypto industry and blockchain is growing at a very fast rate these days that these types of things will become the norm in a few years.

[allisonn]

I guess it's something like provably fair with decentralized exchanges. Except that in a casino provably fair is all you need, but on a low volume exchange, there are no limit to the tricks you could do. I'll stick to reputable exchanges, but then again almost all of them have some user issues.