Mesh opens its decentralised exchange to the public

Mesh has opened its decentralised exchange to all registered investors on its platform, so investors can trade directly with each other on a willing-buyer-willing-seller basis, securely and in real time. This follows the huge success of the secondary market for Die MOS 10Y Prime +2% Floating Rate Bond.

A decentralised exchange (or DEX) is a peer-to-peer marketplace that enables financial transactions that are not officiated by brokers, banks or any other intermediary. “Instead of having a single party who decides whether or not you can trade, the DEX allows anyone to trade with anyone else,” says Mesh.trade Product Owner Jacques Booyens.

This is decentralised finance (DeFi) in the truest sense, he says. “The main distinction between a DEX and a stock exchange is the fact that the DEX is completely peer-to-peer,” he explains. “You can buy from and sell to other market participants in any volume, whether it’s one to many, many to one, many to many, and so on.”

With Mesh.trade being built on the blockchain, there’s no single point of failure. “This is the opposite of a centralised exchange, where everyone’s assets are sitting in the same place, controlled centrally by the exchange. If something were to go wrong in that type of structure, there’d be a risk that all that value could be lost,” Booyens says. “A DEX, on the other hand, is decentralised and cryptographically secured by private keys, so there’s no single point of failure, Mesh provides the market infrastructure, but is never a counterparty to any trade, so the security parameters are significantly higher than in a centralised exchange.”

Trades on Mesh’s DEX happen in real time, with automatic matching of buyers and sellers. “This allows you as an investor to place an offer to buy a particular asset at a price you are willing to pay, which is then matched automatically when a counterparty comes in with an offer to sell that asset, at a price that matches yours. That level of automation is not possible in traditional markets, but as a licensed CASP with a decentralised exchange, Mesh is able to execute these kinds of trades – automatically and in real time and is now opening this up to all its investors.”

The DEX is also transparent, says Marina Oosthuizen, Head of Platform Operations at Mesh.trade. “The DEX order book is publicly available on the blockchain, where it can be viewed at any time,” she says. “All market participants have full view of the trades executed by the different blockchain addresses, so there aren’t any secret deals.”

Investors, meanwhile, enjoy far greater levels of freedom on a DEX. “As an investor on a decentralised exchange, you are fully in control of your own portfolio,” Oosthuizen says. “You can trade directly with other market participants, you can get out of any position that you enter, and everybody benefits from more liquidity in the market. That’s generally something that’s not been available on traditional exchanges, where you typically have to work through a broker. A lot of your traditional financial assets are also buy-and-hold, so it’s difficult to step out of that position once you’re in. Having a secondary market available on a decentralised exchange gives you the freedom to manage your portfolio.”

And by making its own decentralised exchange available to the whole market, Mesh continues to deliver on its promise to shape capital markets that are secure, accessible, transparent and open to all.