Arwen User Guide v1.0
With Arwen, you can trade on an exchange without trusting the exchange. Trades are done directly from your wallet, and you don’t have to trust the exchange with custody of your coins!
Arwen is currently live, in beta, on KuCoin. You can use Arwen to securely trades of BTC, LTC, BCH and ETH on KuCoin with zero counterparty risk. Each Arwen trade is secure, because it is settled via an instant atomic swap.
This guide shows you how to use Arwen to trade BTC, LTC, BCH and ETH at KuCoin. You can also read our support documents, or watch this demo video. You might prefer to get to know Arwen by trading with testnet coins. So, at the end of this guide, we also show you how to try out Arwen on testnet!
Depositing to your User Escrow
When you trade with Arwen, you don’t need to deposit your coins at the exchange. Instead, you use your Arwen App to deposit the coin you are selling in an on-blockchain user escrow smart contract.
The user escrow smart contract is on the traded coin’s native blockchain. (So, you escrow BTC in a smart contract on the Bitcoin blockchain, you escrow ETH in a smart contract on the Ethereum blockchain, you escrow LTC in a smart contract on the Litecoin blockchain, etc.)
Your Arwen App has one of the keys to this escrow. This key protects your coins, even if the exchange is hacked.
You can sell coins from your user escrow once it confirms on the blockchain.
You can close your user escrow at any time. Closing your escrow releases coins back to your wallet. To protect your coins, your user escrow also has an expiry time. If the exchange goes offline, becomes unresponsive or gets hacked, you will be able to close this escrow after this expiry time (without any help from the exchange!).
Requesting your Exchange Escrow
Next, you request an exchange escrow. You can buy coins from the exchange escrow once it is confirmed on the blockchain.
The exchange escrow is funded by the exchange. Because the exchange is escrowing coins for your use, you pay the exchange an escrow fee. The escrow fee depends on the number of coins in the exchange escrow, and the expiry time of the exchange escrow.
The exchange escrow is also a smart contract is on the traded coin’s native blockchain. (Thus, BTC is escrowed in an exchange escrow on the Bitcoin blockchain, etc) Your Arwen App has one of the keys to the exchange escrow. This key protects the coins you buy, even if the exchange is hacked.
You can close your exchange escrow at any time. But, if you want to protect your coins in case the exchange becomes hacked or unresponsive, you should close your exchange escrow before it expires.
Trading with Arwen
Now that we have a user escrow and an exchange escrow, we’re ready to start trading. To trade, we need to pair a user escrow and an exchange escrow. Each trade uses the RFQ (Request for Quote) trading instrument.
Multiple trades can be executed against a given escrow. Also, we can pair different escrows, as long as they are at the same exchange.
Once we are done trading against an escrow, that escrow can be closed. Once an escrow is closed, the balance of coins owned by the user is released into the user’s wallet, and the balance of coins owned by exchange is released into the exchange’s wallet.
Arwen on Testnet
Your Arwen App has a switch that allows it to quickly move from testnet mode to mainnet mode. You can trade with Arwen on mainnet at KuCoin. Testnet mode allows you to trade at a number of fictional testnet exchanges, like Coinboss, Roloniex, Mt. Fox, etc.)
To try Arwen on testnet, you need a wallet that supports testnet.
We recommend downloading Coinbase Wallet for mobile (Android or iOS), a non-custodial wallet that supports BTC, ETH, BCH, and LTC testnet. You can switch to testnet from the Advanced Settings section of the Settings tab. For ETH please choose Ropsten Testnet.
(Note! Testnet mode hides your mainnet wallet coins in the Coinbase Wallet. And remember to never delete any wallet without ensuring you have your seed recovery phrase!)
Here are some other wallet options:
•Electrum supports BTC and LTC testnet (See instructions.)
•Metamask supports ETH testnet.
You also need some testnet coins!
Here are some faucets that will give you free testnet coins that you can trade with. If you’re having trouble getting coin from these faucets, just email firstname.lastname@example.org and we will send you some testnet coins.
- BTC: https://coinfaucet.eu/en/btc-testnet/
- BTC: http://bitcoinfaucet.uo1.net
- LTC: http://testnet.litecointools.com
- LTC: https://faucet.xblau.com
- BCH: https://testnet.wormhole.cash/faucet/
- BCH: https://coinfaucet.eu/en/bch-testnet/
- BCH: https://developer.bitcoin.com/faucets/bch/
- ETH (Ropsten): https://faucet.ropsten.be/
- ETH (Ropsten): https://faucet.metamask.io/