Following the trend set by Binance, Korean crypto-asset exchange Bithumb is set to launch its own decentralized exchange (DEX) by the end of October, according to Business Korea . Bithumb will target a global user base with this move, as the DEX will launch “through its overseas subsidiary” so as to avoid South Korean regulatory impediments.
Bithumb has partnered with OneRoot for the move, who will provide their Ethereum-based R1 transaction protocol for order matching and liquidity on the new DEX. This move stands in contrast with Binance, who instead are building an in-house matching platform .
OneRoot claim that their protocol is “far more efficient than other decentralized transaction protocols”, by separating order matching and order execution. The Chinese company emphasized key aspects of their platform in their Medium post, such as “traffic sharing” and “a win-win ecosystem”, a profit-sharing mechanism of the platform.
The Korean exchange has had its share of obstacles this year. It was fined by the South Korean government for poor custodianship of users’ data, briefly lost and regained its banking relationships , was hacked twice , and implemented Know-Your-Customer checks .
Given the rash of problems faced this year, implementing a DEX is perhaps Bithumb’s most direct route to a global user base.
According to a Business Korea source, “[Bithumb’s] latest decision seems to be the company’s strategy to compete with other leading exchanges in the global market by opening a decentralized exchange that receives attention in the global market.”
“Decentralized Exchanges are the future”
The DEX space seems to be heating up, as InterStellar recently launched its StellarX DEX using the Lumens (XLM) cryptocurrency, while Binance’s DEX is slated to enter beta testing early next year. Several other small DEX’s are already up and running.
DEX’s offer the same trustless benefits as crypto-assets in general, as well as increased security and privacy; but they continue to suffer from a lack of liquidity, are not as user friendly as centralized exchanges, and can’t accommodate fiat currency, wrote Nathan Sexer of ConsenSys earlier this year.
Binance’s “CZ” (Changpeng Zhao)
CryptoGlobe that “decentralized exchanges are the future,” but that it’s going to take us “a few years to get there.”