Serum is an exchange infrastructure provider built on Solana that offers partner protocols on-chain trading at a speed and efficiency that rivals centralized exchanges.
Serum is a decentralized exchange (DEX) built on Solana to leverage its high speed and low transaction costs. The majority of DEXs use an automated market maker (AMM) model as opposed to an orderbook due to Ethereum's low scalability and high gas fees, which makes an on-chain matching system inefficient. Serum was able to use an on-chain central limit orderbook (CLOB) as it was built on Solana, which can produce blocks every 400-600ms. The CLOB also allows liquidity to be aggregated across pools, rather than being fragmented across protcools. Ecosystem partners can compose with Serum's on-chain CLOB to share liquidity.
Serum collects fees on each trade. Trading fees are incurred when an order is executed. The protocol has 6 different fee tiers that vary depending on the amount of SRM the user is holding. 80% of the fees earned are used to buy back and burn SRM tokens. This leads to deflationary model over time as usage expands.
SRM holders receive discounts on trading fees. The more you stake, the greater the discount. You can also stake SRM to earn 20% of the trading fees.