After cryptoassets themselves, exchanges are arguably a very powerful a part of the crypto ecosystem. With out exchanges, people would have fewer means for purchasing and promoting crypto, which in flip wouldn’t profit from the spectacular value rises which have pushed a lot funding into the area in 2020.
However whereas 2020 has been a fairly good 12 months for exchanges, what can we count on from them in 2021? In accordance to varied buying and selling platforms talking with Cryptonews.com, we’re possible to see quite a lot of vital traits emerge subsequent 12 months, as exchanges adapt to the altering construction of the crypto business.
These embrace an growth of DeFi (decentralized finance) companies and token listenings, a renewed focus on decentralized exchanges (DEXs), and additionally a revamping of consumer expertise, significantly within the wake of PayPal’s transfer into crypto. There will even be a common growth of buying and selling options, together with partnerships with retailers and a push for brand new licenses.
2020: What was anticipated, and what occurred?
Again in 2019, business gamers mentioned that exchanges would principally focus on three fundamental areas: decentralized exchanges, diversification, and enhancing safety.
Historic month-to-month high tier vs decrease tier quantity
DEXes did improve in quantity over the course of 2020, however for essentially the most half it wasn’t the main centralized exchanges that launched them, however moderately unbiased gamers wanting to carve out niches for themselves (e.g. Gnosis). Nonetheless, we did see Bitfinex launching its EOSfinex, a non-custodial change on the EOS mainnet.
Exchanges definitely diversified in 2020. Binance launched a brand new staking platform, a wide range of futures and choices buying and selling companies, and its personal Binance Card. Likewise, Coinbase launched its personal Visa card in the US, whereas additionally rolling out its Coinbase Custody service internationally and increasing its staking companies.
As for safety, many main exchanges did introduce new measures and techniques, however hacks remained pretty widespread (e.g. KuCoin).
Month-to-month spot vs derivatives quantity
2021: Exchanges focusing extra on DeFi
We spoke to executives with three exchanges for this text, and all three talked about DeFi when requested which areas shall be significantly vital for exchanges in 2021.
“Our personal purchasers have proven elevated curiosity in DeFi tokens, so we listed all kinds of them on our platform. Simply at first of November we’ve added 12 new ones, accessible for each buying and selling and staking functions. And we plan to combine with the DeFi discipline even stronger sooner or later,” mentioned Konstantin Anissimov, the Government Director at CEX.IO.
Binance CEO Changpeng Zhao attracts an analogous image, regardless of admitting that he prefers not to speculate an excessive amount of about what new services or products Binance shall be launching over the following 12 months.
“That mentioned, I feel the DeFi improvements we’ve seen this 12 months round liquidity swimming pools and [automated market makers], particularly for stablecoin buying and selling are very attention-grabbing. I imagine these are right here to keep,” he instructed Cryptonews.com.
Zhao added that Binance has already launched many DeFi-oriented merchandise, reminiscent of liquidity swimming pools and financial savings (curiosity/yield producing merchandise).
“We additionally created the Binance Innovation Zone particularly for itemizing newer cash, offering liquidity for DeFi tokens whereas defending much less skilled merchants from the dangers in buying and selling them,” he added.
The regular evolution of DeFi merchandise is one thing that OKEx CEO Jay Hao signifies shall be a precedence for this change additionally.
“I feel that DeFi-style incentives have turn out to be more and more vital for exchanges to provide, and we are going to evolve and enhance the staking initiatives that we’ve on OKEx, so this additionally consists of OKEx Jumpstart Mining which permits OKB holders to acquire early entry to up-and-coming new tasks and earn staking rewards,” he mentioned.
And with the overall worth locked into the DeFi sector hovering above USD 14bn, it’s a protected wager that increasing DeFi companies shall be vital for just about each main change subsequent 12 months.
Extra diversification, licenses, decentralized exchanges
Very like specialists prompt final 12 months, the individuals we’ve spoken to this time round point out that exchanges will once more focus on diversification, providing as many various merchandise as doable so as to present a extra full ecosystem of companies.
“In 2021, we are going to proceed to work on enhancing and creating OKExChain to host an ecosystem of decentralized apps with a fundamental focus on buying and selling,” mentioned Jay Hao, including that one other precedence for OKEx shall be increasing the partnership community and retailers who settle for its OKB coin.
Konstantin Anissimov famous that CEX will even be diversifying in a wide range of areas subsequent 12 months.
“I can’t disclose full data for now, however what I can say is that our new companies will meet the wishes and wants of all kinds of purchasers – from people to large-scale institutionals,” he mentioned.
Because the above quote suggests, this ‘diversification’ is one other method of claiming that exchanges will adapt to the altering wants of customers and companies inside the cryptoasset ecosystem, whereas additionally introducing new options or companies that may entice extra institutional buyers into the area.
A technique of engaging extra funding is to launch in new markets, and CEX shall be pursuing such a method in 2021 by making an attempt to acquire certification in as many areas as doable.
“We plan on changing into one of many only a few cryptocurrency exchanges with respected and well-regulated standing throughout the entire of the US, the UK and Singapore,” mentioned Anissimov.
One particular space that can obtain ongoing consideration in 2021 shall be decentralized or non-custodial exchanges, though as with final 12 months, it will contain change upgrading and enhancing their non-custodial choices, moderately than launching utterly new ones.
“We will even develop OKEx Earn to accommodate extra of the tokens that our customers want to see and will proceed to strengthen OKEx DEX, as we see a really sturdy future for decentralized finance and have already contributed to its development,” mentioned Jay Hao.
With PayPal producing headlines in October by launching its personal crypto service, the chance arises of exchanges shifting in an analogous course in 2021 and providing its personal cost companies. Nonetheless, the exchanges we’ve spoken to don’t actually view PayPal as a rival, even when some would really like to get extra concerned in funds.
“Development in funds was one of the vital apparent use circumstances we hoped to see extra of in 2020, however hasn’t taken off as strongly anticipated … A greater technique could also be to latch onto present fiat cost rails in order that they’ll co-exist. Binance Card is one step in that course,” mentioned Changpeng Zhao.
No matter whether or not PayPal will turn out to be a direct rival to crypto-exchanges, exchanges will look to refine their consumer expertise (UX) in 2021.
“Sure, we intend to enhance the consumer expertise, each for cellular customers and for the online ones. We plan to make a handy cellular interface comparable in simplicity and comfort to fashionable on-line banks, the place you possibly can simply retailer, change, obtain, ship, stake cryptocurrency,” mentioned Konstantin Anissimov.
OKEx’s Jay Hao additionally affirmed that the change is working to repeatedly enhance consumer expertise, as does Binance’s CEO.
“For instance, we lately launched a Lite model of the Binance app which streamlines the interface for an easier buying and selling expertise and extra a newbie pleasant method to purchase crypto with fiat,” Zhao mentioned.
Taken as a complete, 2021 will see exchanges more and more adapt to the cryptocurrency ecosystem’s evolution. This can imply extra DeFi merchandise, new buying and selling options, and extra of the UX and licensing that can herald growing funding.
Be taught extra:
Crypto in 2021: Bitcoin To Experience The Similar Wave Of Macroeconomic Issues
Crypto Adoption in 2021: Bitcoin Guidelines, Ethereum Grows & Faces Rivals
Crypto Regulation in 2021: The Piecemeal Strategy & New Winds
Crypto in 2021: Establishments Desire Bitcoin, Retail Open to Altcoins
Crypto Tech In 2021: Focus on Scalability, Privateness and Usability
Crypto Safety in 2021: Extra Threats In opposition to DeFi and Particular person Customers