Just a day after Ethereum suffered a flash crash, plunging from $352 to 10 cents before rebounding to $325, a Hong Kong-based firm, OpenANX, has released a new real-world application of
decentralised exchanges built on the Ethereum blockchain. It says it has developed
key technical aspects that will tackle two major problems in the cryptocurrency
space – the barrier to entry for new cryptocurrency users, and risks associated
with many transactions.
The new platform says it will allow new market entrants to
easily enter the space and to understand their exposure to risk on any
potential deal, a feature that’s lacking in current exchanges. “With OpenANX,
customers will have greater control over their crypto-keys than on a centralised
platform, helping to protect them from vulnerabilities that lead to hacks and
failures,” the firm says.
The key technical aspects include credit risk markets,
transparent collateral ratings for Asset Gateways, and the use of smart
contracts for memberships, collateral management and dispute resolution,
know-your-customer (KYC) and settlement for asset exchange, both for OTC and
order book-based transfers.
“OpenANX’s move to transparency and smart contracts is
something that’s been needed in the industry for a long while, but has yet to
be effectively implemented,” said Bok Khoo, advisor to the openANX project. “By
incorporating technology to secure users’ assets, transactions remain
decentralized while becoming more secure.”
One of the challenges facing crypto-asset markets is the
open source nature of the trading infrastructure, whereby anyone can
effectively tap into the trading network while remaining anonymous. This makes
KYC and anti-money laundering compliance more difficult, although as this
recent article in Profit & Loss
are underway to solve the problem. The OpenANX move is the latest is such
The firm also says that the addition of credit risk markets whereby the tokens
issued by any Asset Gateway can be traded with any other Gateway’s tokens,
allows users of the platform to demonstrate, in real-time, market sentiment
about the viability and risk of a Gateway. “This feature, alongside greater
protection for the customer, another first in the digital asset space, works
hand-in-hand to provide consumer protection for platform users,” OpenANX says.
The platform says it will also protect users by having each
Asset Gateway post collateral into a smart contract. These deposits are
transparent and consumers can read and evaluate the creditworthiness of
Gateways based on this information. In the event of disputes, an impartial
party could evaluate the claim and has the potential to release a part of the
collateral to cover damage or loss.
“These improvements aim to significantly reduce risk for all
users, and are a sign that the cryptocurrency market is beginning to mature,”