Open OTC through the Quantum Swap Market and a DCRM gateway for interoperability in "Fusion" had been an exciting prospect since I first heard of Fusion. Unfortunately, it's still not a reality yet. However, Chainge Finance has introduced a decentralized escrow (descrow) through smart contracts, made possible by the upgraded EVM capabilities of Fusion and it allows for highly secure direct trades that offer even more OTC possibilities, even though use complexity might be higher.
Descrow is perhaps the most natural and straightforward use of a smart contract. It's an agreement between two parties registered in code that can't be broken unless both parties agree. At the core of the agreement is a sum of cryptocurrency (the escrow). This can be in any of the over 1500 universal FRC759 assets running on Fusion (basically all cryptocurrencies anyone ever heard of). However, in most cases, people may use USDT for a descrow due to its stable nature and general usefulness in Chainge contracts.
When utilizing descrow, the contract initiator locks in the escrow, proposing the contract to another party. The creator can add performance bonds (additional money to be locked in) for themselves and for the counterparty. After deciding everything, the counterparty can either accept or deny the contract. If accepted, neither the escrow nor the performance bonds will move until both parties agree.
To illustrate how this can work in practice, let's consider website creation (an example inspired by my earlier writing). In this hypothetical scenario, someone wants to create a website built for 1000 USDT and contracts a freelancer they don't know to do it for them. In this case, the descrow involves the website creator putting down a performance bond of 50 USDT, and the person who wants the website putting down a performance bond of 250 USDT in addition to the 1000 USDT placed in escrow.
If the website is completed satisfactorily, the website creator receives 1000 USDT, and both parties get their performance bond back. This provides assurance that the website creator will complete the job as expected.
However, if the website is not completed, the contract can be canceled, and the website creator gets their performance bond back, while the contract creator gets back both the escrow and their performance bond. This provides assurance for the contract creator that they will not lose their money if the website is not completed.
The locked-in funds in the smart contract provide assurance for both parties that satisfaction must be reached. This is because the website creator knows that they will not get paid unless the website is completed satisfactorily, and the person who wants the website knows that they will not lose their money if the website is not completed.
In some cases, the contract may need to be renegotiated if the person who wants the website is too demanding or if the website creator needs to put down a lot more work than was expected.
Using a descrow contract for website creation provides a level of assurance for both parties that they will get what they want. It's a solution that can be used in many other scenarios where there is a risk of commitment from one or both parties. It's more work than a regular "send," but you can assure yourself you'll actually get something from it in a completely different way. In fact, never in history, has this much trade security been possible so cheaply.
The Quantum Swap Market is a decentralized OTC-market where trading parties do not need to rely on a third party, and any Fusion asset or TL Fusion asset can be traded in advanced ways. The word "swap" is used for many things in the crypto space, making it confusing. Quantum Swaps have little in common with swaps on AMM DEXes and are more akin to Atomic Swaps but less limited. Compared to Decentralized Escrow, they are more direct and immediate, but are limited to things that exist on the Fusion blockchain.
Quantum Swaps can:
Swap multiple asset types in a single tx.
Allow for partial fills according to the rules set by the swap maker.
Work for both TL assets and "full" assets.
Be handled in private or posted on the open "swap market."
What are the problems?
The swap market is limited to Fusion assets, which have no real market value apart from FSN. Thus, the current swap market should mostly be considered a demo.
There is no wallet or app that properly handles the swap market in a good way. Although the functionalities have been built into https://www.myfusionwallet.com/, it often has issues, especially when attempting to be a maker of swaps. https://dopamineapp.com/ also supported the Swap market (at least for a while).
The offers that exist tend to be scams set to trick new users into taking bad TL FSN deals, such as luring them into giving away their time value for 1000 years without realizing it.
How could these problems be solved?
These problems could only be solved through some kind of hard fork or a specialized interoperability bridge between Fusion Assets and FRC759s.
The myfusionwallet rehaul may fix some things for the swap market.
This part may be a tougher problem to solve. A solution could be to build an app that properly filters out "bad offers," which could become the most used solution if the swap market evolves. Currently, step 1 is to get the swap market going with real assets. Early users will likely still need to beware of a multitude of scams.
If swap market issues were one day solved it could possibly end up providing a simpler/faster alternative to descrow as long as the trade is merely an exchange of already cryptofied assets supported within the swap market.