For most crypto investors, the crypto exchange is one of the most important vehicles for transacting. Crypto exchange is an online platform used to buy and sell cryptocurrencies. They are the most common means that investors use to buy and sell cryptocurrency holdings.
Some investors may find the concept of a “centralized” exchange to be somewhat misleading, as digital currencies themselves are often billed as “decentralized.” We had experts from Biki Exchange, Liquid and Digifinex discuss on some of the most important issues around this. The highlight video from the event is.
Some of the things discussed were
Pros & Cons for the centralized crypto exchange
Both centralized and decentralized exchanges cater to different target audiences and they have their benefits and shortcomings. For centralized exchanges, because of centralization, the speed of transactions is a lot faster and there is a lot more liquidity. Centralized exchanges take the lead in terms of scalability of the tech and its robustness. Centralized exchanges lack the security aspect when compared to decentralized exchange.
The biggest challenges in operating a crypto exchange
There are over 700 registered exchanges currently but the actual number is much higher. And then there are so many white-label exchange providers and they continue to create exchanges. Keeping up with this increasing competition is a huge task. For an exchange to stay relevant and stay on top of the minds of the project is a huge challenge. A lot of product R&D and brand voice differentiation are required to stand out in the market. Because there is so much noise in the market it is very difficult for the true message to reach the project. The communication is the most important challenge
The lifeblood of exchange is the trading volume- number of users you are acquiring, number of users trading. Customer acquisition is often one of the biggest challenges for an exchange. Figuring out what keeps your product different? One strategy that could work is focusing on a niche market and then opening up an exchange for traders in that geography. How you acquire new customers usually sets you apart.
Thoughts on jurisdictions moving forward
Exchanges are anticipating announcements from the MES in Singapore. It is expected to be a regulatory framework that does not stop innovation but in fact, pushes it. Regulators are taking a very nuanced approach but with a global mindset. They don’t just want to shut down exchanges, they want to let the innovation flow.
Crypto sometimes is positioned as a tool for money laundering. That unfairly leads to treating crypto as a criminal tool. Regulators will be taking steps to make sure that crypto is not used for anything illegal. It’s going to be difficult for the regulators to make sure the regulations are followed.
Address pump and dump coin as an exchange
In the traditional equities market when you do a Pump and Dump does the SEC come after exchange or the owners. As an exchange, you are just a marketplace. Your role is to bring buyers and sellers together. If a Pump & Dump happens it’s not a criticism of the exchange its criticism of the groups that are manipulating the market. This is very similar to the gun debate, who is the criminal who sells the gun or who pulls the trigger in the school.
Post the discussion the participants of the event networked with the speaker and other participants and the event was described as absolutely amazing by most of them.
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