1) A sidechain solution for their decentralized exchange. Altcoin.io will NOT work based on atomic swaps, but will use the Plasma sidechain solution instead.
2) The Altcoin.io will play the role of the main verifying node for the sidechain smart contract.
“Plasma reaches consensus using Proof Of Authority (PoA). In other words, an operator (i.e. an Altcoin.io main node) signs transactions and commits them to blocks.”
This hints that the exchange is not really 100% decentralized, since the Altcoin.io node will be the “main node” that commits the transactions’ results to respective coins’ blocks. So, if the node is compromised in some way, they are implementing a a fraud protection mechanism:
3) The “mass exit” happens if the verifier detects fraudulent or malicious activity on the operator side. During a mass exit all users funds are unlocked from the Plasma smart contract and everyone gets their tokens back without losing anything. Except for the time they spent and possible profit loss after the exchange rates have changed.
4) The liquidity problem is still there (like for all decentralized exchanges), and Altcoin.io is planning to solve it by basically enabling white-label usage of their platform and recruiting as many users as possible. By allowing customizable user interface and embeds they hope to get a lot of users from third parties that will supposedly contribute to the shared liquidity pool. This is a bit of a “vicious circle” solution since it means “we will ensure liquidity by having more users” – well, hopefully the white label solution will help the service spread.
We would love to see Altcoin.io succeed and present a bit more secure and less centralized solution than the existing centralized exchanges. That is why we encourage everyone to sign up to Altcoin.io and wait for further news.