Bitnasdaq: Leading the De-centralization of Exchange Driven by Ecological Engine from Trading Center

On October 17, 2019, a press conference with the theme of “Bitnasdaq Exchange Briefing” was held in Shanghai. The press conference was hosted by Peter, co-founder of the Chinese Community of Bitnasdaq Exchange. 

At the meeting, Peter, co-founder of Bitnasdaq Chinese Community, shared the general situation of the digital currency trading platform, the development of the digital currency trading platform industry, the general situation of BitNasdaq digital currency trading platform and the prospect of digital currency trading platform. He stressed that the competition of the trading platform is fierce at present, but the head effect is not obvious, so the business of the exchange can accommodate more people. 

Among them, Peter mainly makes a detailed analysis from the aspects of block chain and industry characteristics, and introduces the industry development of digital currency Exchange. He said: “At present, there are more than 1200 kinds of digital currency in the world, and the daily turnover in the market is about 250 billion yuan, only one third of the peak in January 2018. After experiencing great changes, the global digital currency market gradually returned to the December 2017 level, and the market situation gradually returned to normal.” 

“In the future Bitnasdaq will start with globalization, multilingualism, support for legal tender transactions and system security, so as to ensure users can experience safely and efficiently.” Peter also said: “Most trading platforms are cautious and avoid touching the regulatory policies of various countries. At the same time, Peter also analyzed the current development status of mainstream exchanges from the perspectives of flow, token mechanism and business structure. At the same time, he also focused on the current business layout and structure of Bitnasdaq.”

Exchange Flow “Big Three”

As of the first half of the year, trading has gathered user flow at an unprecedented rate. In the Top 50 exchange, about 83% of the user traffic is concentrated in the Top10 exchange, while the remaining 40 can only divide the remaining 17%, among which the top three are Binance, Coinbase Pro and Bittrex respectively. 

Source of image: CoinMarketCap

The business of the exchange is not only to provide traders with digital assets and legal tender, or trading pairs between digital assets, but also to improve the mature industrial chain from mining, pledge of rights and interests to issuance of tokens, dividends, destruction, etc. Its status is also gradually moved from the trading node to the engine of the ecological community. The exchange token is the first attempt to centralize the diversified business of the exchange, which is of vital importance in the process of the entire exchange industry moving towards business failure.

Binance: First Practitioner of Exchange Token

The original exchange token was the BNB launched by Binance on July 25, 2017. BNB has a total of 200 million pieces, of which 100 million are for ICO public distribution. According to BNB’s operating policy, traders can use BNB toekn to discount mortgage transaction fees.  Under the background that the established exchanges are generally criticized for the exorbitant handling fee of 2‰, the handling fee for the mortgage of the token has undoubtedly hit the user’s pain point. Through the issuance of BNB tokens, BNB has not only gained the viscosity of users, but also ensured the substantial development of the exchange itself through the ICO proceeds of 100 million BNBs. 

Part of the exchange’s trading status (as of June 30, 2019) 

Source of data: CoinMarketCap

“Out of Circle” Journey of Exchange Token

The exchange is no longer satisfied with only cultivating in the secondary market, but has begun to compete with communities such as Ethereum and EOS for the ecology of the primary market. Binance completed its eighth buyback and destruction since BNB went online in July this year, this time destroying more than 800,000 BNBs with a market value of more than 23 million US dollars. The BNB released by Binance now has as many as 40 or 50 application scenarios, and is seeking to “Out of Circle” and enter applications in daily life such as entertainment and travel.

Exchange tokens are similar to original digital assets such as bitcoin and are natural deflationary assets. The deflation logic of the token is that the platform needs deflation to improve the value of the token of the exchange and continuously provide appreciation expectations to the token holders. “Buy-back and Destruction” is one of the most commonly used means to maintain the deflation of the exchange token.

The equity dividend function of the exchange token refers to that the exchange users can receive the exchange dividend on a regular basis according to the proportion of the token they hold. With the mainstream consensus of crypto currency gradually shifting from POW to POS (or POS-like mechanisms including DPOS, LPOS, HPOS, etc.), the “mining” method of exchange token came into being. That is, the user only needs to hold the currency and lock the position, and can obtain the corresponding dividend according to the share of the locked position token. In this mode, users mine through mortgage token and obtain profits. This process is Staking. In 2019, Staking has already been called one of the major innovation directions in the crypto currency sector.

De-centralized Exchange Attacks Strongly

Compared with its centralized competitors, the decentralized exchange allows users to keep their own account private key, while the exchange itself only undertakes the functions of intention matching and transaction chain-up. At present, decentralized exchanges support many different forms of trading agreements, such as 0x, Loopring, etc. At present, the more mainstream decentralized exchanges probably include WhaleEX, DDEX and TRXMarket.

At present, the governments of various countries are still ambiguous about the industry in digital currency. Therefore, obtaining the compliance license of the host government is the primary task of the emerging exchange. As an exchange with the New York headquarters and the Asia-Pacific headquarters in Seoul, South Korea, BitNasdaq is applying for digital currency exchange licenses in the US and the EU this year. This undoubtedly removed the policy regulatory and compliance risks that emerging exchanges may face.

BNB: Token BNB is the main direction of development in recent years

Different from the common competitors installed on ETH or EOS public chain, BNBDex chose to install it on its own public chain Binance Chain. In addition to supporting BNB, BNBDex also supports mainstream transaction pairs including BTC, ETH and USDt. according to CoinMarketCap statistics, BNBDex currently supports 71 transaction pairs, ranking about 60+ in the world as a whole.

Binance Chain, the public chain that bears the foundation of BNBDex, and BNB, the token on this chain, have been regarded as the main direction of BNB’s deep cultivation in recent years. By 2019, BNB has grown into a leader in the exchange token, with a total market value of 4.6 billion US dollars, ranking first in the world. In addition, considering that the upper limit of the exchange token will ultimately be linked to the size of the exchange itself, BNB, backed by RMB, also has good prospects to look forward to.

BitNasdaq: Multi-party layout, complete community layout and business structure

BitNasdaq Exchange also follows a multi-directional route. According to the white paper of BitNasdaq, its business scope includes, in addition to the centralized exchange, a de-centralized wallet BNwallet (Chinese name is “Biniu Wallet”) and a public chain BitNasdaq Chain (Chinese name is “Biniu Public Chain”, hereinafter referred to as “BNChain”), as well as a BNC token on the public chain, which together form the overall community ecology of BitNasdaq. In a sense, BitNasdaq has had a complete community layout and business structure since its inception.

Users may put the security of the exchange’s own digital asset depository at the forefront of considerations. BitNasdaq uses a decentralized wallet BNwallet to solve this problem. BNwallet’s decentration makes the wallet private key self-contained by the user and stores the digital assets on the block chain instead of being hosted on the centralized server. Like decentralized exchanges, decentralized wallets can also reduce the risk of hacker attacks and theft.

BNwallet takes the form of pursuing the latter as much as possible on the premise of ensuring the first two. As a multi-public chain and inter-currency wallet that supports BTC, ETH and its own BNC token, BNwallet has already realized C2C decentralized transactions. According to the description of official documents, BNwallet will increase the number of public chains after the technology is further upgraded. The transaction on BNChain can already realize “seconds confirmation”.

1. Best Advantage: Transaction “seconds confirmation”.

Transaction per Second (TPS) of block chain is widely considered as one of the important indexes to evaluate the transaction potential of a public chain system, and is also one of the common weaknesses of traditional public chains. BNChain’s TPS on the public chain has reached a high level of about 1500, which is roughly equivalent to Ripple, known as the “transfer artifact”. 

Some main public chains TPS

2. Comprehensive digital currency exchange

BitNasdaq, as a comprehensive digital currency exchange, provides a variety of trading types including currency trading, legal currency OTC, aggregate trading, leveraged trading, perpetual contracts, financial management, etc. The business section of BitNasdaq includes the public chain BitNasdaq Chain and the BNC token based on the public chain. As a native token of the BNwallet chain, BNC has a similar task to its peers – as the token of the exchange, it is also the ecological trading fuel of BitNasdaq.

BitNasdaq is an ecological construction based on the exchange public chain. With the expansion of the exchange’s business in the ecological direction, the “currency security model” based on the exchange’s public chain and laid out around the token economy and ecological community may become the business template of mainstream exchanges.

Bakkt: The Attempt of Traditional Finance to Settle in Blockchain

The vision of Bakkt, which belongs to intercontinental exchange group (hereinafter referred to as ICE), is to open up the ecological closed loop from futures and spot trading to digital token trading. As the first step of this plan, on the night of August 16 (Beijing time) this year, it announced that it had obtained the approval of the New York State Financial Services Agency (NYDFS) and would officially launch the world’s first BTC futures contract for physical delivery on September 23, with a view to providing institutional investors with legal and compliant BTC investment channels. 

A brief description of Bakkt’s business, source: Bakkt official website

With DCM and DCO licenses in place, Bakkt may compete with derivatives exchanges such as LedgerX. Bakkt Pay is a mobile payment project launched by Bakkt. For this project, the greater significance lies in the landing of digital token in real trading scenarios, instead of just storing or speculating the token as a kind of value. With its back to industrial giants, exchanges with traditional financial backgrounds often take the initiative to set foot in markets with higher compliance requirements and stricter policy supervision.

Moving towards the community is the only way for the centralized exchange to develop in the decentralized digital asset network. After extending its business and constructing the community through public chain and IEO, the “centralized” color of the exchange has undoubtedly been diluted. However, this kind of business model that uses public chains to drive communities may be an answer given by today’s centralized exchanges when facing their de-centralized competitors. In the future, the centralized exchange can be transformed into a community, so as to continue to promote the continued prosperity of the entire digital asset network as a part of a multi-engine system. 

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