Crypto Exchange Market: Top Issues to Consider
If one wants to trade, he/she mostly relies on crypto exchanges. But we should remember: nothing is flawless in our world. And the exchanges are no exception. We’ve already been focusing on their problems and trends, rivalry with over-the-counter market and the issues of scalability. Now it’s high time to make a kind of a conclusion to our research. Today we’ll talk about principal issues crypto exchanges face today, the way they influence and are influenced by users and the entire crypto market. Let’s get it started. Trust and security As of now, market conjuncture doesn’t allow new exchanges to cut through the noise. Firstly, it’s all about the users’ bearish behaviour. Alex Strześniewski, a Business Development Director at CoinDeal (coindeal.com), says the following: “It's difficult to attract users for a new exchange. It's difficult to convince new users to involve because the people who entered the bull market a year ago, they have already got their favourite exchanges which they are not likely to give up using”Alex StrześniewskiBusiness Development Director at CoinDeal And it’s hard to argue with that. Community has become much more skeptic and experienced than 2-3 years ago. New projects are now perceived with a pinch of salt and, as a rule, cannot break through, thus not creating the healthy competition on the market. Here’s what we’ve got: new projects die on the vine, ‘whales’ and ‘old boys’ make the exchange market monopolised. As a result, the environment becomes stagnated, with no essential updates and changes. And how the practices of Mt.Gox, Bithumb and Coincheck have shown (those exchanges have suffered severely from hacker attacks), the changes have long been a must. That’s why new exchanges should find unique ways to involve skeptic users. Community should trust you in every aspect of the trading process, and that’s what Jason Wang, CHAOEX CEO, is talking about: “To build trust is never an easy task. We at CHAOEX fully understand that we need to consistently deliver information about us, to let user know everything about our team, platform, know what we are doing. We have our own channel, which help us show that we do not only live in the moment, but also have eventful past and promising future. We try to keep users updated with the problems we face and always take their advice and comments into our consideration. Our community is our friends – and one of our key goals is to make them feel it”Jason WangCHAOEX CEO According to Max Grain, a Product Management Executive of Bitlish, trust is underpinned by the variety of factors. He adds the following: “Trust is based on operational history, openness, and even pricing policy. We at Bitlish have one of the lowest commissions for Visa/Mastercard operations in the world. Other factors have less impact, but it’s never stop trying to improve the user experience”Max GrainProduct Management Executive of Bitlish Scalability Another equally important issue of new exchanges is the way it keeps up with the pace of its own development. In simple terms, it’s scalability. Through the prism of the time, the issue of scalability has been pursuing the crypto market since its birth. Naturally, when Bitcoin emerged in 2009, it was not initially designed with the idea of widespread use and adaptation in mind. As the number of daily transactions continued to rise, an increasing number of issues were popping up. The same thing is with crypto exchanges. Ilya Bere, Changelly CEO, shared his experience with us: “After the hype of 2017, we realized that scalability was one of the critical factors for long-term market survival. In particular, one of our focuses in 2018 was the increasing of the technical scalability of our project. Meanwhile, since our partners are exchanges, we still see some of them facing scalability issues as demand increases. We hope that in the nearest future all players will be ready for a new crypto wave”Ilya BereChangelly CEO A suitable scaling solution is an optional way out, which could already become useless in several months. A team behind the exchange should follow a well-thought-out strategy and play long-term. Here’s what Andrei Popescu, a Co-Founder of COSS.IO, explains: “Even a small exchange should be ready for large-scale trading. Such trading implies high volumes and scrutiny that even the most popular crypto asset exchanges today may not be prepared to handle.”Andrei PopescuCo-Founder of COSS.IO Self-regulation Regulatory measures, both internal and external, play a lead role in exchange’s success. Users want their assets to be fully protected, and that’s what reliable and complex regulation contributes to. A textbook example of how to comply with law is KuCoin. Its Co-Founder and concurrently a Vice-President stated his position on the issue: “We work with several external AML institutions. They are quite matured in terms of service package setting and implementation. As an exchange, we aim to better serve our users, if there are AML services with higher quality, why shouldn’t we integrate them for users’ sake? Plus, we also have internal team in charge of AML procedures. Backed by the internal-external collaboration, we believe that the efficiency of our work will improve, without sacrificing security and privacy.”Johnny LyuKuCoin VP Wrapping up The race “to Become as Trustworthy as Possible” is going on. And that is amazing: the harder competition is, the more approaches and alternatives appear. Users must have choice, because where there’s the choice, there is also a great room for the further development. We are already in history, operating in the fastest-growing environment, with no end in sight. But still, there’s a lot to do and bring here. *This article is based on the exclusive interviews with top-managers of several crypto exchanges. Cryptonomos is most grateful to Andrei Popescu, Co-Founder of COSS.IO; Johnny Lyu, KuCoin VP; Srdjan Mahmutovich, Kriptomat CEO; Jason Wang, CHAOEX CEO; Ilya Bere, Changelly CEO; Max Grain, Product Management Executive of Bitlish, and Alex Strześniewski, Business Development Director at CoinDeal.