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Paypal Veteran Hops On Crypto Gravy Train, Joins 0x (ZRX) Advisory Board

Former Paypal COO David Sacks Joins 0x Crypto Startup

As the nascent cryptocurrency industry continues to gain traction across the globe, talents from legacy industries have begun to flock to promising blockchain/crypto-centric startups. Most recently, David Sacks, the former chief operating officer (COO) of Paypal, has entered an advisory position at the well-known 0x project, reports Fortune.

According to the report, 0x, a well-known provider of a decentralized exchange protocol/system, has just announced a formal partnership with Harbor, a regulatory compliance platform aimed at certain forms of securities tokens. Along with establishing a working relationship, this move sees the aforementioned Paypal COO, who backs Harbor, take a position on the 0x advisory board.

Expressing his excitement for the news, Sacks issued a tweet, writing:

Excited to join the advisory board of – one of the most important projects in crypto – which is helping to build the security token tech stack along with portfolio companies and . 

Many saw this collaboration as a positive signal, as some proponents of emerging technologies believe that securities tokens will drive the adoption, growth, and maturation of the cryptosphere in the coming years. 0x CEO Will Warren, who is evidently a diehard advocate for securities tokens, expressed his hopes for this subset of crypto assets, stating:

In the next five years, there will be a massive shift away from securities being in closed systems that are highly regulated and hard to access. It will be a much more open system where trading location is less important. But for this to happen, there needs to be a security token tech stack.

Speaking with Fortune, Josh Stein, the CEO of Harbor, drew attention to the fact that 0x and Harbor are complementary of each other, making it clear that the two firms should mutually benefit from this recently-established bond. Stein explained:

0x and its growing network creates the opportunity to connect buyers and sellers around the world. By tackling the regulatory compliance challenges of tokenizing private securities, Harbor makes it easy for issuers and investors to abide by existing rules and regulations across jurisdictions.

Calling back to a previous report, Fortune brought up a conversation held with Paypal’s former COO, who holds a position as the co-founder of Harbor and a partner at Craft Ventures.

According to Sacks, the real estate industry will be the first legacy market and asset class to see a move onto blockchain-centric systems, as blockchain assets evidently make it easier to transact in the real estate market than the tedious, long-drawn-out processes involved with the traditional act of purchasing and selling land. Additionally, real estate-backed crypto assets can be easily be divided, which creates an opportunity for unique investment opportunities that will only be available via modern technologies.

0x (ZRX) Falls 5% In Correlation With The Market

Even in the face of positive news, it has become apparent that ZRX, the native crypto asset of the 0x ecosystem, fell in correlation with the rest of the market. At the time of writing, ZRX is worth $0.638 a piece and is down 4.88% in the past 24 hours.

Chart Courtesy of TradingView
Photo by Campbell Boulanger on Unsplash

The post Paypal Veteran Hops On Crypto Gravy Train, Joins 0x (ZRX) Advisory Board appeared first on Ethereum World News.

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Decentralized Exchanges Aren't Living Up to Their Name – And Data Proves It

Some say a “decentralized exchange” is an oxymoron. Perhaps not, but for now it’s not much more than an aspiration.

Over the past year, dozens of cryptocurrency trading platforms have marketed themselves as decentralized exchanges. While models vary, the term implies they allow users to trade on a peer-to-peer basis, and more importantly, without using a platform operated by a single entity.

The main selling point is that unlike today’s better-known crypto trading platforms (think Coinbase, Kraken or Binance), a decentralized exchange shouldn’t require traders to store their money with a third party that can be hacked. Yet while “DEX” has been a hot buzzword, it’s been unclear how decentralized they actually are.

Early indications, however, suggest they’re not living up to their name yet.

According to data collected exclusively for CoinDesk from July 2 to July 12 by the ethereum analytics firm Alethio, as well as interviews with market participants, what decentralized exchange models actually offer is a spectrum of technologies with varying degrees of centralization.

Some attempt to decentralize a traditional exchange company, such as the Huobi Chain Project announced in June, while others seek to build a community with stakeholders around a peer-to-peer model, like 0x.

“Decentralized exchanges are making headway toward the re-elimination of central parties in that [crypto trading] system,” said Wall Street veteran Jill Carlson.

But they still have quite a ways to go.

Alethio data analyzing DEXs from July 2-12.
Note: RadarRelay is a 0x relayer.

For example, Bancor was itself the only market maker on its decentralized platform, where it facilitated roughly 9,691 token swaps between 1,147 traders over the two-week period, Alethio found.

That lack of diversity compounds a problem with the “decentralized liquidity network,” highlighted by the steps Bancor took to address a recent $13.5 million hack. Specifically, Bancor’s freezing of funds, an action allowed by a mechanism in its code, prompted criticism that the platform was, for all intents and purposes, no different than its centralized predecessors.

“You’re not a ‘decentralized exchange’ if you’re taking away other people’s tokens whenever you want,” tweeted developer Udi Wertheimer.

Decentralized how?

One problem with talking about decentralization in this context is that it can be measured in different ways. An exchange platform might be highly centralized in one dimension but quite decentralized in others.

Take, for example, 0x. During the two weeks tracked by Alethio this open-source protocol that relies on independent relayers for token trading, had 914 market makers facilitating 9,017 trades by 234 traders – already head and shoulders above Bancor in the diversity-of-participants department.

However, those trades are funneled through a much smaller number (17) of “relayer startups.” Each relayer has its own business model, and the majority of them use their own proprietary software built on top of 0X, rather than purely open-source code that anyone can inspect.
And while 0x isn’t responsible for compliance with regulations, its relayers are. So it’s hard to call this type of DEX leaderless.

One of those relayers, Paradex, was acquired in May by Coinbase, a company that many in crypto would call the quintessential centralized exchange.

To be fair, though, it could be argued that the 0X ecosystem is arguably more decentralized than other exchanges in the way that counts the most.

“It’s different from a centralized exchange because these relayers are not holding user funds at all. They are completely non-custodial,” Amir Bandeali, CTO of 0x, told CoinDesk. “We have seen a lot of relayers starting to make open source market-making tools.”

For Carlson, who works as a consultant to 0x, the term “decentralized” should primarily apply to non-custodial trading platforms. As such, she believes hacks such as the Bancor theft point to the dangers of centralized custodians, telling CoinDesk:

“When we talk about decentralized exchanges, the primary threat that people are concerned about today is custody.”

Early days

Stepping back, it’s important to remember that the DEX market is in its infancy, and so the volume is still pretty low.

Indeed, among the DEX platforms analyzed by Alethio, the most popular was IDEX, an exchange developed by the fintech firm Aurora, which facilitated 69,339 swaps between 12,400 traders during the two-week period.

Compared to centralized Bitfinex, which facilitated roughly 92,024 trades in just two days, from July 9 and 10, according to CoinDesk’s analysis of its trade history, IDEX’s volume is a tiny drop in the niche bucket.

Marshall Swatt, founder of the institutional crypto asset exchange Swatt Exchange, argued that decentralized exchanges are merely “a fancy form” of over-the-counter (OTC) trading that won’t be able to scale. He told CoinDesk:

“I just think the lack of fiat on-ramps, the lack of governance, and the lack of compliance, are going to relegate decentralized exchanges to the margins.”

Swatt, who previously co-founded the New York bitcoin exchange Coinsetter then sold it to Kraken in 2016, warned against underestimating the difficulty of managing compliance, security, and customer support, business departments that may not fit bitcoin’s grassroots model.

“You’ll never have the level of liquidity because it will never attract the algorithmic traders,” he said.

Indeed, most DEX models only allow users to swap one cryptocurrency for another, which keeps newcomers to crypto, whether they be institutional investors or first-time buyers, at bay.

Carlson agreed it’s hard to imagine decentralized order books, market makers, or know-your-customer identity checks. These are all core pillars of most popular exchanges.

However, in her view, it’s an oversimplification to say DEX is merely glorified OTC.

“The difference here, at least today, lies at the settlement level, not at the execution level,” Carlson said, speaking to how some DEXs allow P2P settlement without third party oversight or custody. “What you end up with is an experience that is disintermediated.”

DEX fever

Indeed, none of the shortcomings of current decentralized exchanges have quelled the DEX fervor sweeping the industry.

Speaking to the Paradex acquisition, Scalar Capital co-founder Linda Xie, a Coinbase alum turned hedge fund manager and 0X advisor, told CoinDesk demand for non-custodial P2P platforms could inspire centralized incumbents to offer DEX options as well.

Indeed, Bloomberg reported the long-established exchange Binance wants to “decentralize” itself. So does the legacy platform provider Huobi, which announced in June it’s offering roughly $166 million to a fund for contributors to the upcoming Huobi Chain Project, which aims to establish a decentralized autonomous organization (DAO) and eventually incorporate parts of Huobi’s exchange.

“We’re not 100 percent sure if a corporation can be 100 percent autonomous,” Gordon Chen, Huobi Chain Project’s executive leader, told Coindesk. “We’re not sure if it can be 100 percent decentralized either. But we believe there can be some kind of balance in between.”

Although granting businesses more sway than users on Huobi’s voter-driven exchange HADAX sparked backlash, a few hundred people already applied to build the project’s public blockchain.

Along those same lines, Bancor co-founder Eyal Hertzog tweeted that his project is also on a “pathway to decentralization.”

Alethio’s data suggests that so far platforms with more straightforward P2P models have achieved more diversity of participants, even if they have so far gained less traction. For example, during this two-week period in July the startup AirSwap, which operates almost like a Craigslist for ethereum tokens, facilitated 695 swaps between 216 traders with the help of 60 unique market makers.

Such potential is why Xie remains optimistic about the prospect of DEXs, saying: “This is still just the start.”

Agreeing with Xie’s point, Carlson said the wide range of models offer a promising starting point for the further decentralization of trading platforms, concluding:

“All aspects of the spectrum have an important role to play.”

Man in maze image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Decentralized Exchange Startup 0x Raises $775K in SAFT Sale

Decentralized exchange protocol developer 0x raised $775,000 in just a few days through a Simple Agreement for Future Tokens (SAFT) sale, new filings show.

A Form D filing with the U.S. Securities and Exchange Commission from April 3 reveals that 22 investors participated in the round. It is not immediately clear who backed the sale or how the funds will be used.

The new round comes on top of a $24 million initial coin offering (ICO) the company completed last August.

At the time, 12,000 backers invested in the startup. Previously, the company raised an undisclosed amount from various venture firms, including Polychain Capital, Blockchain Capital, Pantera Capital, Jen Advisors and FBG Capital.

0x’s over-the-counter platform is aimed at enabling the exchange of different ERC20 tokens across varying networks, as previously reported. The platform was first released for testing in May 2017.

At the time, founder Will Warren said the startup would not provide a real-time public order book, instead focusing on the creation of open-source tools so that other startups could build their own decentralized exchanges.

To that end, the non-profit startup also developed several infrastructure tools, as previously reported. Warren told CoinDesk that he believed “the quickest path towards realizing our vision is by developing free tools that massively lower the barrier to entry for new for-profit exchanges and their respective markets.”

Data table image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Decentralized Exchange Startup 0x Raised $775K in SAFT Sale Last Year

Correction (16th April 5 p.m. EST): An earlier version of this article inaccurately reported that the $775k was drawn from a recently conducted SAFT sale. According to 0x, the funds were sourced from a SAFT sale conducted last year with investors.

This article has been updated to amend the inaccurate information.


Decentralized exchange protocol developer 0x raised $775,000 last year through a Simple Agreement for Future Tokens (SAFT) sale.

A Form D filing with the U.S. Securities and Exchange Commission from April 3 reveals that 22 investors participated in the sale.

Previously, the company said that it raised an undisclosed amount from various venture firms, including Polychain Capital, Blockchain Capital, Pantera Capital, Jen Advisors and FBG Capital. The filing represents the first time that the actual amount raised and the precise number of investors have been disclosed.

The startup garnered $24 million in an initial coin offering (ICO) the company completed last August. At the time, 12,000 backers invested in the startup.

0x’s over-the-counter platform is aimed at enabling the exchange of different ERC20 tokens across varying networks, as previously reported. The platform was first released for testing in May 2017.

At the time, founder Will Warren said the startup would not provide a real-time public order book, instead focusing on the creation of open-source tools so that other startups could build their own decentralized exchanges.

To that end, the non-profit startup also developed several infrastructure tools, as previously reported. Warren told CoinDesk that he believed “the quickest path towards realizing our vision is by developing free tools that massively lower the barrier to entry for new for-profit exchanges and their respective markets.”

Data table image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.