Bithumb, South Korea's second largest cryptocurrency exchange, has officially launched a new decentralized trading exchange (DEX). This new initiative was made possible in partnership with One Root Network (RNT), which provided a decentralized protocol based on Ethereum technology to enable decentralized transactions.
The R1 protocol is used to separate order matching and order fulfillment and is believed to improve the efficiency of the entire process. Exchange liquidity and order data will also be available to all other R1-based trading platforms, so there will be a large pool of liquidity from the very beginning of trading.
As the crypto sector attracts more attention from regulators, Bithumb has decided to use a foreign operator to operate the platform to avoid legal issues and local restrictions imposed by regulators in South Korea. Moreover, recently a controlling stake in Bithumb was sold for $354 million to a consortium led by a plastic surgeon from Singapore.
As part of the launch, Bithumb announced a promotion. The company intends to provide $100,000 USD (500 ETH) in rewards through airdrops. Users with the most activity on the new platform will be eligible to receive rewards.
There seems to be a definite trend of companies creating decentralized exchanges as they need to overcome some of the problems of centralized platforms. Major players such as Binance and Kyber have decided to enter this market, followed by many other companies launching similar initiatives. Decentralized exchanges differ from centralized platforms because users permanently store crypto assets without the need for a third party, but instead use a P2P system. Thus, decentralized exchanges are more secure since users are responsible for their own money.
The Waves DEX decentralized exchange launched back in July after hackers took over the exchange's website, so decentralized solutions can be used to provide greater security.
Binance founder Changpeng "CZ" Zhao recently noted that they have less control over decentralized exchanges, which is a good and a bad thing. Among other things, it is easier to get a listing on such exchanges, so obviously more scammers are attracted to this type of business.
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