The growing popularity of cryptocurrencies inevitably sparked a new market for these digital assets. As a result, the past few years have been particularly active for innovators within the crypto trading space. Today, there are over 100 crypto exchanges globally with some notable mentions being Binance, OKEX, Huobi, and AAX. This number is on an upward trend given the advancements in regulatory consideration and implementation in some jurisdictions.
Crypto exchanges as we know them are meant to facilitate the trading of digital currencies. They have however evolved to offer more services within financial market structures such as derivative trading in crypto futures. The AAX exchange, for instance, has 5 futures contracts which include BTC/USD, EOS/BTC, ETH/USD, LTC/BTC and XRP/BTC. Other than that, digital currency exchanges have also proposed a significant value in integrating FX markets to boost liquidity within their crypto ecosystems.
Crypto Exchange Market Niches
Despite the volatile nature of digital assets, a firm like Huobi has been expanding its footprint in Asia with an interest in crypto regulated countries. Other markets like the U.S.A have also emerged as hot regions for crypto and fiat trading services. Just recently, the U.S Democrats had proposed a digital dollar creation to be a means of the $2 trillion package approved for the Coronavirus (COVID-19) pandemic. However, this part was excluded from the final bill hence will not be implemented as part of the legislation. According to an article by Cryptoast, the move would have been detrimental to the 4th amendment as the Fed would eventually have ease of access to anyone’s account once they create a wallet for them. The article reads;
“The main problem with such a Fed-controlled account is therefore that any seizure from a citizen’s account would be of unprecedented ease.”
Given such opportunities and more in developing economies, exchanges like AAX and OKEX have positioned themselves to gain market share through their convenience. These crypto exchanges are among a few that have gone an extra mile with service provision in crypto trading.
The AAX Exchange
AAX crypto exchange has proven its fundamental value in digital asset trading based on its ecosystem infrastructure and available trading portfolios. The network is powered by its utility token, AAB, whose value is deflationary in nature. Basically, AAX native tokens are bought back and burnt on a daily basis to facilitate the ecosystem incentives and other functions that rely on AAB to be executed or recorded.
The AAX crypto exchange offers OTC, spot and futures trading for cryptocurrencies; over 60 spot pairs have since been rolled out within AAX. As mentioned earlier, users can also trade crypto derivatives on this exchange. With these initiatives, the firm has brought institutional-grade markets closer to crypto traders looking for smooth executions in a timely manner.
AAX also leverages the LSEG matching engine, Millennium Exchange, to link its crypto ecosystem with global finance. This technology has been instrumental in providing liquidity and low latency within the AAX environment given its prominence in the London Stock Exchange, Borsa Italiana and Oslo Stock Exchange. It is, therefore, no surprise that AAX exchange meets its integrity, security and convenience solutions compared to peers in the crypto exchange business. Notably, AAX is the first digital currency exchange to implement the LSEG tech for a better market infrastructure.
OKEX Crypto Exchange
The OKEX platform prides itself on being a one-stop solution for crypto trading globally. This network facilitates a number of services within the exchange of digital currencies and their acquisition using fiat money. It is quite notable that OKEX clients can directly purchase up to 6 digital assets with the option of paying in over 10 different fiat denominations. The portfolio of directly accessible digital coins includes BTC, USDT, ETH, XRP, LTC and OKEX’s native token, OKB while the likes of USD, EUR, and CNY lead the pack of accepted fiat currencies.
Apart from the purchase of digital assets, OKEX enables spot and derivative trading for crypto markets based on its ecosystem listings. This exchange has been instrumental in crypto-to-crypto trading as well as leveraged positions given its margin provisions. Just like AAX, the platform has gone a mile further to introduce futures, options and perpetual swaps based on cryptocurrencies. With this initiative, OKEX is tapping into a fast-growing market as crypto enthusiasts embrace complex ‘wall street like’ products.
Some of the notable OKEX products include its cloud platform and the utility token, OKB. The former plays an important role in creating market liquidity, token listings, cross-platform development, and spot trading solutions. The OKB token on the other hand, fuels OKEX’s network through function enabling and ecosystem maintenance. These deflation tokens were 300 million in total and are set to be gradually bought back and burnt as per OKEX’s clear and Public Burn Mechanism.
These deflation tokens were 300 million in total after 700 million unissued tokens are burned in one time- a little change here
The Future of Crypto Exchanges
Cryptocurrency markets are becoming more resilient by the day hence more entrants into the space. That said, some challenges have constantly slowed down the adoption of crypto coins and affiliated products such as crypto exchanges. At the top is legal uncertainty, the fact that crypto is quite grey has been both an advantage and disadvantage but mostly the latter for serious crypto exchanges like AAX. Crypto firms in the U.S especially New York have in the past closed operations due to a constant back and forth with the New York Department of Financial Services (NYFDS). However, alternatives like the crypto valley in Switzerland present a way out for the business continuity of these crypto exchanges.
In terms of market prospects, crypto exchanges are yet to hit the peak. This area of innovation has earned a seat at the table of FinTech operations despite criticisms from traditional market believers. As it stands, the world is looking for cashless options to stop the spread of COVID-19. We can only hope that if massively adopted, crypto exchanges will not be compromised as has been in some cases like the Mt Gox hack.