Competition in the cryptocurrency exchange marketplace has grown considerably in recent years, with dozens of platforms seeking to establish a layer of this nascent space for themselves. Wishing to build on initial success in providing more traditional crypto and CeFi solutions, and following a surge in interest for DeFi services, some of the top exchanges are now seeking to offer the best of both worlds. The goal? A reliable and recognizable hybrid solution to merge the benefits of CeFi and DeFi, while mitigating the drawbacks.
Generally speaking, CeFi mirrors legacy finance, allowing users to earn interest or obtain loans, providing the safety of risk-transference against the drawback of requiring custody of assets. DeFi applies the use of smart contracts to financial instruments, cutting out the intermediary. It is non-custodial, but you take on the systemic risk of there being a fatal code flaw in the protocol. A balanced hybrid solution, therefore, may provide an ideal combination.
Two platforms doing just that are Bitrue and OKEx, with varying ideas on how best to offer such a hybrid model. In the battle of Bitrue vs OKEx, here’s how the two platforms measure up.
Established in 2018, Bitrue describes itself as a financial management platform, specializing in digital assets, investments, loans, and trading. It gained traction by adopting XRP as one of its base currencies and going on to become one of the top three trading platforms for the asset.
Witnessing impressive 620% daily trading volume growth year on year propelled Bitrue into the top tier of global exchanges. Now managing daily trading volumes over $300 million, with 1.6 million users, it offers some of the lowest fees on the market utilizing the Bitrue platform token, BTR.
Under the leadership of CEO Curis Wang, Bitrue was the first exchange to offer an Investment Earnings Product, Power Piggy, allowing customers to earn a passive income of up to 10% interest on a variety of assets, later becoming a widespread feature amongst competitors.
Bitrue has extended its range of hybrid financial products since, including loan and BTR staking services. Bitrue Loans allows you to pledge assets to borrow USDT, BTC, XRP, or ETH. You retain the right to those assets but can free up capital in them for other uses. Assets locked up in Power Piggy can also be used as collateral for loans, allowing you to borrow against them while continuing to earn interest. BTR Lockups act as an additional staking opportunity to generate special caps at significantly higher rates than the Power Piggy feature alone.
In August, Bitrue then announced plans for DeFi additions under Bitrue Financial Services (BFS). Expected to launch in early 2021, BFS will initially allow lenders to add assets to the liquidity pool available to borrowers, with those lenders receiving interest, followed by additional decentralized products over time. Bitrue will also upgrade the existing loan service under this umbrella, making the wallets that contain collateralized funds publicly viewable in a step towards providing users with greater power over their finances. As a result, they’ll offer both existing CeFi and new DeFi products at the same time, making them one of the first hybrid platforms. It will provide different types of users a more diversified range of investment options in one convenient location.
The new Bitrue Finance token (BFT), to power these hybrid CeFi and DeFi services, launched in mid-September, with BFT tokens also being distributed to BTR token holders. BTR will continue to focus on powering the traditional exchange utility of Bitrue. BFT will support the new hybrid BFS as a reward, payments, and voting token, as well as a balancing mechanism within the decentralized lending system.
OKEx, in operation since 2014, is another of the top tier exchanges on the market. Self-described as the world’s leading one-stop crypto exchange, they provide spot, margin, futures, and options trading, alongside mining pools services, the Jumpstart token sale platform, and OKB utility token. Delivering daily trading volumes over $1 billion, it ranks amongst the highest in the industry. The OKEx DEX is also in development on testnet, building out a decentralized exchange platform on top of the OKExChain.
OKEx Earn offers a range of ways to earn interest on crypto assets, combining the best internal CeFi options, DeFi, and staking opportunities to maximize potential. Similarly, OKEx Loan provides access to instant borrow markets from various CeFi and DeFi options in one place.
To incorporate DeFi functionality amongst the CeFi options, OKEx has taken a different approach to their hybrid solution. CEO Jay Hao announced in August an initial lending aggregator integrating Compound Finance and plans for a One-Stop DeFi Trading Shop, eliminating the need to transfer funds between wallets. The move meant that instead of developing their own DeFi products, OKEx would connect to third-party DeFi Yield Farming protocols, such as Uniswap, Curve, and YFII. As a result, they are only facilitating access to these services, convenient though that is, and don’t take responsibility for any systemic risks associated with them.
Users need to consider the pros and cons of such platforms for their individual circumstances. Bitrue seems to offer the most straightforward system for the mass market, utilizing familiar major-cap assets and will allow you to balance exposure with a more diversified range of options on a reliable platform. They are developing a convenient hybrid of CeFi and DeFi worlds while reducing systemic risk from incorporating additional protocols.