Several cryptocurrency exchanges are looking to build their own blockchains, which means that somewhere down the line, we’re likely to see the birth of several crypto exchange-birthed tokens.
Exchanges Are Making Their Own Blockchains
Some trading platforms have already made this goal a reality. Binance, for example, is the largest and most popular cryptocurrency exchange by volume. The asset trading company has given rise to both Binance Coin (BNB) and Binance USD (BUSD), which is the exchange’s new stable currency. This means it’s based off USD and fiat properties, thereby preventing it from being as volatile as more mainstream digital tokens such as bitcoin and Ethereum.
But Binance has also unveiled its new blockchain project which it’s calling Binance Chain. The network seeks to “copy” Ethereum to an extent and invoke smart contracts capabilities. In a blog post, the company writes:
This innovative solution brings the interoperability and programmability of the Ethereum Virtual Machine (EVM) to Binance Chain. Both Binance Chain and Binance Smart Chain will allow transfers and other communication thanks to the native support of interoperability.
Binance isn’t the only company taking this initiative. OKEx – based in Malta – announced last February that it had unveiled its own blockchain project called OK Chain, and that it was moving into a “test mode” for analysts to better understand. Jay Hao – CEO of OKEx – explained in a recent interview:
OK Chain is a commercial public chain developed by OKEx independently, and it is already 100 percent open-source to provide an efficient, free and boundless value-added ecosystem for all of our ecological partners. The cross-chain and ‘Open DEX’ technology enable us to push forward our vision of ‘Commercial Chain Alliance’ to facilitate the substantial development of the blockchain industry.
Other cryptocurrency exchanges to recently unveil their own blockchain plans include Bithumb in South Korea and Huobi.
According to Ken Misuma – CMO of Quras – crypto exchanges developing their own blockchains makes perfect sense, as it will allow them to be safer and operate “more efficiently.” He also says that they can grow their market shares and provide people with more privacy as they engage in transactions thanks the abilities of smart contracts employed through the chains. He states:
Digital asset exchanges try to attract as many traders as they can in order to increase their user base, which is a core driver of their profits. Developing a blockchain allows an exchange to have more flexibility from a usability and trading offering perspective without the need of a centralized operator.
Keeping Things Secure and Stable
Hugo Renaudin, CEO of crypto exchange LGO, offered similar sentiment, saying that individual blockchains could potentially make exchanges much stronger. He states:
Operationally, it’s a significant cost-cutter as a lot of operations and fund movement – deposit, withdrawals or settlements – can be automated through smart contracts.