What Is Serum (SRM), How It Works & Where To Buy It?

The Serum network is the new fully decentralized exchange ecosystem built on the Solana blockchain. Serum focuses on interoperability while the ecosystems highlight decentralibility with an AMM (automated market maker) model.

The Serum ecosystem is a platform that makes exchanging one token for another extremely easy because you don’t have to go through a KYC procedure.

With that said, you also have the ability to add any trading pair you like on Serum’s decentralized exchanges because of the traditional swap system they use.

Serum’s DEX benefits from various capabilities on a centralized exchange, but users still retain complete control of their funds.

The cross-chain feature allows users to trade various coins, including BTC, ETH, and ERC-20 tokens.

 

How Does Serum (SRM) Work?

The SRM tokens can be held, exchanged, or traded like any other cryptocurrency. Still, the team at Serum exchange also takes advantage of Solana’s virtual machine to execute smart contracts on the blockchain.

The Serum token can be seen as a cross-listing of an ERC-20 token, which means it can collaborate with tokens based on Ethereum’s blockchain.

Because the Serum DEX is built on the Solana blockchain with a cross-chain feature, it also adapts the benefit of quick transactions. For example, Solana handles 50,000 or more transactions per second, while Ethereum can only handle 15-30 per second.

 

What Is Serum Used For?

The native token, SRM, governs the entire Serum project.

With most projects making use of DAO to assist with the governance of the network, Serum DEX uses a system similar by leveraging the native token.

Every SRM holder gets a chance to participate in the voting sessions for network development.

The Serum team has developed a decentralized finance protocol that ensures optimum efficiency with the governance of the network through the SRM token. Before they decide to take a vote, it has to be discussed in a formal and informal manner within the community forums.

Various proposals have to be addressed within the meetings like:

• Voting on any new features that can be beneficial for the platform.
• Which projects built on the Serum blockchain will receive a grant from the company for the value of the project they built.
• Any liquidity mining programs can be implemented or upgraded to accommodate more users.

After all discussions have been met, the coating can begin. Users have to purchase SRM tokens to participate in the voting process, 1 SRM token qualifies as one vote, so if you want to hold more power in the process, you’ll need more tokens.

The same can’t be said for those who want to create proposals for such a voting process; they must hold a minimum of 25,000 SRM tokens.

Those wishing to create the entire governance must have 100,000 SRM tokens which you can stake to take control.

So we can see the SRM token’s power on the entire network.

 

Where To Buy Serum (SRM)

The SRM token can be purchased or sold on several exchanges, and you will need to have fiat currency to buy the token.

When choosing the exchange, you want to determine which will give you the best price. Then you’ll need to register on the exchange and have your fiat currency and digital wallet ready to receive the token.

Some of the wallets you can choose from include Phantom wallet and Solflare wallet.

The major centralized exchanges on which you can buy SRM are:

• OKX
• Binance
• Binance
• HTX
• ByBit

Note: This is not to be considered financial advice but for educational purposes only.

 

Biggest Competitors Of Serum

Even though Serum has a lot of potential, it isn’t short of having a lot of competition. Such is the nature of building a decentralized exchange in the already growing blockchain space.

There is always the chance that Serum will grow above the rest, but only time will tell.

For now, they have to watch out for competitors like:

• XRP
• Solana
• Avalanche
• Polkadot
• FTX Token

 

What Are The Future Plans For Serum?

So far, the exchange is not fully decentralized because it requires a centralized oracle to provide it with price updates and live information.

The plan is to develop a decentralized oracle and move to the exchange to become completely decentralized.

Serum aims to introduce other DeFi additions, including borrowing, yield farming, lending capabilities, and broadening the horizon of its decentralized finance ecosystem. They also want to increase the cross-chain bridges coming to the exchange, which will increase the potential greatly.

The Serum ecosystem plans to improve the platform’s user experience because they saw so many other decentralized exchanges that are severely lacking in that sense; they see this as a way to rise above the competition.

Another goal they have is to incorporate the Ethereum Virtual Machine within the network. Although Serum is still young in the space, they do possess a lot of potential.

The Serum Foundation can learn from other players in the game, like Uniswap, which has a total value locked of nearly $7 billion, so partnering up and collaborating with various companies like these will see the company as a valuable player in the marketplace.

 

Pros And Cons Of Serum (SRM)

Pros:

• The Serum ecosystem has solved one of the main issues in many decentralized exchanges, which offers the user low transaction costs when using the platform.
• The waiting time for transactions to come through is extremely quick.
• The company has the backing of various other successful businesses thanks to the founder Sam Bankman-Fried who is considered one of the greatest minds in the space. Not only that, it is built on a solid blockchain with loads of credibility, the Solana blockchain.

Cons:

• The ecosystem tokenomics might be deflationary, but the problem comes with regard to the circulating supply; most experts will feel that the supply is too low, which can result in a risk to the network.

 

FAQs About Serum (SRM)

How long has Serum existed?

Sam Bankman-Fried is much more than just a computer scientist and math graduate from MIT; he is the founder of two very successful companies, Alameda Research and FTX. But that’s not all; in August 2020, he launched The Serum Foundation.

He and his colleagues from FTX wanted to create a DeFi protocol where the decentralized exchange would be autonomous, so the Serum project was born.

Ever since the company’s launch, it has seen some exceptional growth with support from many centralized exchanges and multiple collaborations. One such collaboration was with Chainlink to provide the decentralized exchange within the ecosystem with pricing oracles.

Two other members lending their expertise to the project in the form of advisors are Long Vuong, the founder and CEO of TomoChain, and Robert Leshner, the founder of Compound Labs.

What’s controversial about Serum?

One of the most controversial topics around Serum is the cross-chain swapping mechanism which doesn’t have a complete explanation.

The problem comes with the fact that no one knows what needs to be presented for users to swap their BTC for SRM. This can cause trust issues with the platform as the full explanation is not present in their whitepaper.

If the platform doesn’t plan to explain exactly how they plan to validate any cryptocurrency transaction, it will leave users in the dark about exactly how secure the solution is.

How many SRM tokens are there?

There is a maximum supply of 10,161,000,000 SRM with a total supply of 1,092,844,982 SRM. There is also a circulating supply consisting of 263,244,669.00 SRM.

Can SRM be mined?

To validate any transactions, the Serum DEX doesn’t use proof-of-work or proof-of-stake. Because it is built on the Solana blockchain, it uses proof-of-time.

This means that the strategy looks at the previous blocks and establishes if the sequence of entries matches up with the blockchain distributed ledger and validates the transactions accordingly.

To get back to the question at hand, Serum can’t be mined. Even though it doesn’t use a proof-of-stake mechanism, there is a way around that through staking the SRM token as a node.

Each node must consist of 10,000,000 SRM and at least 1 MSRM (MegaSerum) token. Nodes will play a crucial role as insurance for the cross-chain transactions; each node will receive a portion of the fees for a successful transaction.

A fund of SRM acts as a reward and gets distributed to each node. Each node has a leader who will get a portion of the rewards. Nodes are used to perform crucial duties which will optimize the performance of the ecosystem.

Based on the execution, the nodes will either receive penalties or rewards.

What is the market cap of Serum?

The total market cap of the SRM token stands at $222,166,135 at the time of writing, with a fully diluted market cap of $8,572,188,580 and a 24h trading volume of $47,150,775.

The SRM token is currently standing at number 130 on the CoinMarketCap database.

 

Resources:

https://kraken.pxf.io/B0Rny4en-gb/learn/what-is-serum-srm

https://www.securities.io/what-is-the-serum-srm-everything-you-need

https://academy.shrimpy.io/post/what-is-serum-srm

https://messari.io/asset/serum/profile