It is difficult to put a peg on the number of exchanges functioning in the crypto market because no global standards are governing the creation and operations of these entities. In most cases, an individual or a group of people with the right computing and programming skills can capitalize on the lack of crypto regulations in certain locations to create an exchange and start listing digital asset pairs. This is why traders run the risk of losing their assets due to incompetence and nonchalance on the part of crypto exchange firms.
However, things are looking up, thanks to the apparent increase in regulatory oversight in the crypto space. As such, it has forced these entities to invest their time and resources in innovative initiatives designed to boost compliance or optimize the experience of their customers. Here, I will identify instances where crypto exchanges have risen to the task and introduced innovations crucial to the crypto mainstream movement.
Why Do Crypto Exchanges Have to Continue to Implement Innovative Features?
Not only do crypto exchanges have to push new narratives to keep up in a very competitive landscape, but also, they must introduce new features to ensure dynamism critical in times when the status of the global economy is uncertain. In other words, it is not enough to incorporate new ideas just to gain an edge over competitors. Exchanges must come to realize that the crypto market is still in its formative years. There are lots of factors that could alter the status quo and redefine new paradigms for the crypto exchange landscape.
For one, the emergence of regulatory oversight in various regions of the world is forcing crypto exchanges to up their game and set up certain measures to guarantee the safety of traders. Over the years, this has forced crypto exchanges to comply with KYC standards previously viewed as contradictory to the very essence of the crypto market. Economic uncertainty is another reason why crypto exchange ought to keep experimenting with new technologies. For instance, the COVID-19 pandemic and its aftereffects on the global economy have pushed exchanges to the brink of collapse as a result of unprecedented demand for liquidation. Without any doubt, an exchange, which does not have systems robust enough to deal with such strain, will find it a lot difficult to cope in the coming years.
What Are the Latest Innovations Recorded in The Crypto Exchange Market?
AAX Adopts London Stock Exchange’s Matching Machine
One of the factors used to judge the efficacy of crypto exchanges is speed. Owing to the potency of this sentiment, AAX, a Hong Kong-based exchange has incorporated London Stock Exchange Group LSEG Technology to fast-track the matching of orders. The crypto exchange, which offers spot, OTC, and futures to its growing customer base, has done this to incorporate order matching capabilities on par with renowned traditional markets. The platform believes that such a measure provides it with institutional level performance capacity, which has become paramount following the crippling effect of intense price volatility on exchanges like Bitmex.
According to reports, this development will allow the exchange to set a very low latency settlement of 0.0005s on its Futures trading platform. Being the first exchange to incorporate this technology and the first to deploy it on the cloud, AAX joins the rank of futuristic crypto firms working on developing new ways to ensure that crypto products become attractive to a mainstream audience.
AAX will list PhiGold (PGX) from the 31st of March, 2020. Regarding AAX team:
“The exchange selected PGX for its first commodity finance token listing, because the project strongly aligns with AAX’s mission to connect crypto to global finance. By enabling traders to invest in gold, prior to its extraction from the gold mine, like buying real estate off-plan, PhiGold effectively makes it possible to purchase gold at a discount.”
OKex Launches Its Public Blockchain With Creative Token Model
OKex has successfully expanded the scope of its business by introducing its blockchain network, Okchain. Unlike other exchanges with existing chains, OKex has decided to focus on establishing real-world use cases as the factor responsible for the rise in valuation of its native token rather than pure speculation. Hence, OKex has opted for the Delegated-Proof-of-Stake DPoS as the consensus as the mechanism governing the creation of OKT tokens and validation of transactions enabled within the network.
Another impressive feat about this development is the fact the OKchain adopted a multi-chain architecture to improve scalability and efficiency. And so, Okchain is an ideal option for developers looking to deploy their dapps no matter because of the robust underlying infrastructure or the sustainable token economy. They recently overtook BitMEX as the crypto exchange with the highest Bitcoin futures volume.
Bitfinex Implements A Market Surveillance System
It is no more news that the crypto market is susceptible to manipulations and price rigging. In light of this, Bitfinex has introduced a proprietary market surveillance system, named Shimmer. This mechanism, as explained in reports, will help prevent market exploitation schemes on the exchange platform. In essence, Bitfinex is looking to curtail disturbing market trends like layering and wash trading, as well as enhance transparency and integrity.
According to Cryptotoast, Bitfinex used Rust programming language, which is ideal for high-speed processing and commercial use cases, for its Shimmer protocol. Hence, this is an intentional move to reposition Bitfiniex as an institutional-inclined exchange platform.
Paxful Integrates Chainalysis Reactor
Paxful and Chainalysis, which had earlier disclosed that P2P crypto marketplaces are risky because of the prevalence of decentralized processes, recently announced a surprising partnership to filter and identify high-risk transactions on the latter’s P2P trading platform. The decision to integrate Chainalysis’s surveillance technology on its trading platform boosts Paxful’s credibility as a global and credible entry point to the crypto market.
Huobi Introduces A Liquidation Mechanism
Following the crash of the crypto market, Huobi took the initiative to introduce a liquidation mechanism that partially halts specific trading activities during periods when the market registers unprecedented volatility. Specifically, this system will stop all liquidation and close trader’s positions whenever there is a sudden rise in volatility levels like the ones experienced this month.
Huobi believes that such spikes could cause traders to panic and set off a chain reaction, which might put them at risk. People who are familiar with this phenomenon in traditional stock markets will agree that Huobi has made alterations to the conventional circuit breakers and develop a new system ideal for the crypto market.
The crypto exchanges have thrived as a result of an influx of initiatives looking to improve the performances of trading platforms and widen their scope of operation. The developments highlighted in this article are just a handful of case studies showcasing the innovative prowess of crypto exchanges.