Bitcoin, the world’s most successful cryptocurrency owes its success to three fundamental concepts embedded in the Bitcoin network by its anonymous founder. It is powered by a decentralized, immutable, and trustless network, meaning that Bitcoin is money that has no owner and cannot be controlled by any single entity or institution, even the founder himself has no control over it.
The properties of Bitcoin network make it mathematically impossible to steal from the cryptocurrency users, freeze their accounts, or even stop the users from spending money without accessing their wallet’s private keys. The Blockchain algorithm allows the users’ to truly own and control their money without having to depend on third-party guarantors, regulators, banks, and governments.
However, cryptocurrency users today have willingly relinquished, to some extent, control over their money. Control has been delegated to intermediaries such as centralized exchanges, which allow users to quickly and comfortably purchase and sell crypto-assets at the cost of their privacy and safety. These exchanges are exposed to government or any other single entity’s intervention. When users put their money on the exchange, they no longer own or have control over it, but instead, they entrust it to a third-party just as they would trust banks with traditional money.
The fundamental problem with centralized exchanges operating in a decentralized economy is the fact that they are, by design created to forfeit the basic benefits cryptocurrencies stand to offer. They are prone to outside interference, vulnerable to heists, inside jobs, and even plain malfunctions. This is because centralized exchanges present several vulnerabilities including the possibility of suspension of service, single point failures and unresponsive servers (like DDOS attacks) and more.
The systematic failures of centralized crypto-exchanges can be illustrated by over $2 billion lost over the recent years due to bugs in security protocols, scams, inefficient management and inept internal controls. While this might be the case for centralized exchanges, decentralized exchanges are accompanied with their own sets of flaws. Decentralized exchanges fueled by smart contracts have proven inefficient due to slow trading engines, lower liquidity and a limited set of trade instruments.
They are so inefficient that it would only make sense for traders to turn to the centralized solution, and risk losing control of their funds. This calls for a new solution to tackle the future of decentralization of the crypto-market and the onset of structural adjustments programs that need to be put in place to realize the Bitcoin agenda. A new startup, EXPREAD, is proposing a solution to disrupt the entire cryptocurrency exchange operation.
Decentralize and liberalize.
EXPREAD is a hybrid solution designed to combine the advantages of centralized exchanges (sophisticated functionality, high performance of trading engine) and decentralized platforms (higher security, fully transparent and auditable operations, joint governance) to create a highly scalable white label solution for cryptocurrency exchange operations.
EXPREAD proposes to completely decentralize and liberalize the cryptocurrency exchange by virtually enabling everyone to open his own node of exchange, at the same time bring full aggregation of the liquidity in the whole EXPREAD ecosystem.
“By introducing a new paradigm of operating cryptocurrency exchanges, the EXPREAD platform aims to liberate the space while eliminating the high barriers of entry,” Leo Liu, CEO, and co-founder of EXPREAD explained in a press release.
The ecosystem of white-labeled crypto-exchanges will have a shared order book, trading engine, and liquidity pool. It is built on the proposition of a shared economy on exchange service provision where multiple nodes/exchanges aggregate their liquidity, technology costs, and unique expertise to achieve synergetic value from the network effect. The whole system will be composed in a way that the reserve liquidity is distributed to prevent single point of failures.
The trading system is fully auditable by each exchange providing an adequate internal control process. To ensure that decentralization runs to the core of the system, EXPREAD has an embedded internal governance mechanism that will be used to make sure the entire ecosystem is always moving in the right direction.
Reducing the barriers to entry.
The shared liquidity pool will significantly reduce the barriers to entry in terms of initial capital needed to start a crypto-exchange. This is a chance for anyone who ever wanted to own a crypto-exchange to do so. EXPREAD exchanges will not be required to accumulate a critical mass of buyers and sellers to start and remain operational. This means that the exchange owners can concentrate and leverage their own network, community, and existing client base, where they have accumulated trust, to build their crypto-exchange practice inside the EXPREAD ecosystem.
“2018 promises to be an important year for our platform as the team puts forth a global agenda in order to ensure its fast and sustainable development through acquiring strong partnerships and further funding. We are inviting the active crypto enthusiasts to join our telegram global community in order to gain more insight directly from the founders and technical team of the platform”, said Leo Liu while offering an outlook into the platform’s capabilities.