In a short period of time, EtherDelta was able to establish itself as the go to location for anyone looking to trade ERC-20 tokens. EtherDelta operates as a decentralized cryptocurrency exchange that specializes in Ethereum and ERC-20 tokens, the site acts as a marketplace that facilitates the trading of ETH for almost any token compatible with the Ethereum network.
EtherDelta launched in 2017 after being founded by Zack Coburn and the decentralized trading platform soon became a hub for traders of Ethereum and any ERC-20 tokens. The exchange utilizes smart contracts that are responsible for managing deposits, trading, and withdrawals once a user has successfully integrated a personal wallet with the site.
Much of the exchange’s early success was due to the fact that it was the first point of access to a lot of ERC-20 tokens that were released soon after ICOs. Traders often headed to EtherDelta in order to sell or purchase tokens before they were listed on more mainstream exchanges. At its peak, EtherDelta was able to generate over $10m in daily trading volumes and it remained the premier choice for ERC-20 token traders for much of 2017. However, a change in management as well as a rapid increase in the number of competing sites has seen the volume of trading taking place on EtherDelta decline steadily over the last few months.
How to Trade on EtherDelta
One of the site’s most distinguishing features is its use of smart contracts, users do not need to open an account on the site as functions such as deposits, trades, and withdrawals, are performed via smart contracts that only require a user to integrate a wallet on the site.
EtherDelta is more decentralized than other mainstream exchanges and the site also uses a compact interface that takes some getting used to. The front page contains all the relevant features including the wallet, order book, and price chart and users do not need to navigate to any other pages in order to complete their trades.
The site has a “Select Account” button that allows users to link an already existing Ethereum account or to create a new one with the exchange. Users can also sync a Meta Mask account or a Ledger Nano S and to manage an account, you click on a drop-down menu in the upper right-hand corner of the exchange. After this, you can import or link any wallets or keys with the site.
EtherDelta is slightly tricky to navigate and in order to use the exchange; you must first transfer funds from a personal wallet to the exchange wallet. This can be done by selecting “Deposit” from the Balance box on the left side of the page and any funds held in your personal wallet will be listed under “Wallet”. Any funds that have been moved to the exchange’s smart contract will be listed under “Ether Delta”, and in order to make a transfer, it’s necessary to enter the amount of ETH or ERC20 token you would like to move from your personal wallet to the exchange and then click on the “Deposit” button.
When this is done, a pop-up will display the Etherscan address that allows you to track the transaction. Once the transaction has been verified the funds will show up in your exchange wallet. In order to make withdrawals, users can follow the same process, and it’s necessary to click on Withdrawals in the Balance Box, and then enter the amount you want to move from EtherDelta back into your personal wallet. Once this is done, you just need to click “Withdraw” to complete the process.
Between depositing and withdrawing funds, users can trade a wide range of ERC-20 tokens on the site and place market and limit orders in the same way as on the more centralized exchanges. The transfer process takes some getting used to and the EtherDelta interface can be quite intimidating to new users. However, the smart contract system allows for increased control over your funds, and a higher level of security as users are not required to store their funds on the exchange.
The team behind EtherDelta outlined the site’s fees via a post on reddit; the main fees are listed as follows:
|Deposit ETH||~0.0003 ETH|
|Withdraw ETH||~0.0001 ETH|
|Deposit token||~0.0001 ETH|
|Withdraw token||~0.0002 ETH|
|Cancel order||~0.0002 ETH|
Placing orders on EtherDelta is actually free as the action doesn’t involve an Ethereum transaction, the only platform fee EtherDelta charges is a 0.3% fee paid by the person executing an order (paid in the instrument being sold).
|Place an order (add liquidity fee)||free|
|Execute against someone else’s order (take liquidity fee)||0.3%|
- Decentralized– EtherDelta does not operate as a centralized exchange and this provides users with more options regarding how they choose to use the sight and how they opt to store their funds. Users are not required to open an account with the site and can just integrate already existing wallets.
- Wide range of tokens– The exchange acts as a home to almost every ERC-20 token in existence and users can find tokens on EtherDelta that are often difficult to track down elsewhere. For users looking to trade tokens based on the Ethereum network, EtherDelta has a wide selection.
- Flexibility –Users are able to add new tokens to the site by just inputting the necessary details and tokens that have just been released from ICOs are often first listed on EtherDelta. This responsiveness has attracted many traders to use the site.
- Complicated interface– Ether Delta is not very user-friendly. The compact interface leads users to misread and mistype orders. It’s not uncommon for users to make costly mistakes when using the exchange.
- Slow trades – Due to its decentralized nature, EtherDelta actually performs every single trade, using smart contracts to facilitate the trading. On top of this, the site depends on the Ethereum network, which moves very slowly in the event of a serious backlog. Transactions can take hours or days when the network is clogged up.
- ETH only– Ethereum remains the base currency on the site and all the tokens on the exchange are paired against ETH. Also, only ERC-20 tokens are supported and currencies such as Bitcoin and Litecoin are unavailable.
Is EtherDelta Safe?
In theory, EtherDelta’s use of smart contracts and personal wallet integration should make it one of the most secure exchanges in operation today. In addition, the exchange uses a number of servers and does not require users to set up accounts or to hold their funds on the exchange. Funds are transferred from existing wallets and held within an account based inside the exchange’s network.
EtherDelta’s smart contracts work in tandem with individual wallet addresses and private keys, and without an address’ private keys, it isn’t possible to access that address’s funds. As a result, EtherDelta is technically more secure than centralized exchanges, which hold your private keys, and allow anyone access to your funds if they can gain access to your exchange account.
With EtherDelta, while hackers can view your wallet address, without your account’s private key, they cannot access anything in it. However, the site has recently become a target for hackers and suffered a damaging hack at the end of last year.
In December 2017, an individual hacked EtherDelta’s domain name, and performed a phishing attack on its DNS server. The hacker compromised the EtherDelta website, and swapped it for a false version of the exchange. The hacker was able to steal around 305 ETH, worth over $244,000 at the time.
While the repercussions of the attack would have been worse on a centralized exchange, it seems the hacker was also able to access the private keys of users who deposited them on the copycat version of the site. As a result, some users have reported having their funds stolen even after the real site was back online.
In addition to this, it appears that EtherDelta is under new management after being sold by its original founder Zack Coburn. The new team has incorporated a number of unpopular changes which included an ICO, and charging projects in order to have their token listed on the exchange. Users are also complaining of a change in fee structure with some being met with a notice declaring that they must pay fees well in excess of the amount outlined in the reddit post. Most importantly, the new team behind EtherDelta has lost a lot of the confidence built up over the years and users are now wary of using the site after more reports of lost funds have begun to surface.
The site should still be safe to use, as users hold their own funds within the exchange’s smart contracts, and if you didn’t reveal your private keys on the fake Ether Delta website then you are protected from hackers.
However, even at its peak EtherDelta was not the easiest site to use and was definitely not new user friendly. As a result, even though it may technically be safe to use, it isn’t recommended for new users.
- A decentralized exchange
- A wide range of tokens
- Provides quick access to new ERC-20 tokens
- A Non-intuitive trading process
- Limited by the Ethereum network
- Slow trades and transfers
- Run by a mysterious new management team
After launching in 2017, EtherDelta soon established itself as a hub for all things Ethereum and attracted traders interested in obtaining ERC-20 tokens fresh from ICOs. Despite utilizing a clunky interface and a non intuitive trading process the exchange quickly became popular as it filled a gap in the market and remained a safe way to trade due to its trustless and decentralized nature.
However, the recent hack and actions of the new management team, who has chosen to remain anonymous, have eroded a lot of the confidence built up by the previous team. It’s currently not known what plans the new management have for the exchange and just what measures they are taking to secure the site from any future attacks. This lack of trust has led to the emergence of the ForkDelta project which aims to run an exchange in keeping with the former practices of the exchange. There are also a number of alternatives such as IDEX, Radar Relay, and Ethfinex that have eaten into a considerable amount of EtherDelta’s trading volume.
As a result, We do not recommend EtherDelta as a viable option for new traders when there are safer, more efficient options available. More experienced traders who still want to access the site should create a new account via Metamask and ensure that it doesn’t hold more funds than are needed to complete a particular trade.