8 ms·

Coinbase acquires decentralized cryptocurrency trading platform Paradex

163 points by iMuzz 8y ago

hapnin 8y ago
Awesome. Now people have hundreds more semi-anonymous tokens to which they can attach their personal information.
iMuzz 8y ago
Paradex is a decentralized exchange that's built on top of the 0x protocol. DEXs are great because you can trade cryptocurrency pairs without trusting an intermediary (think Mt. Gox for why this is needed). This move shows that Coinbase is serious about building a decentralized trading platform (unless this is just an acquihire which would be very disappointing). Really exciting news!
- joosters 8y ago
  If there's no intermediary, what exactly have Coinbase bought?
  - philfrasty 8y ago
    There is an intermediary in 0x called a relayer (receiving relayer fees) that brings together both buyer and seller through e.g. an exchange UI. Just the transaction itself does not require an intermediary and is therefore not prone to counter party risk (of course if buyer and seller knew each other before they could just skip the relayer).
  - iMuzz 8y ago
    Sorry I was a little unclear in my comment. There is still an intermediary, they just never touch your funds.
- cbHXBY1D 8y ago
  Seeing as how Paradex isn't the most popular DEX and Coinbase's ties to 0x, I don't think this is an acquihire. This looks like they are actually going to use Paradex as a relayer.
  - tstyle 8y ago
    Out of curiosity, why does “not most popular” imply higher chance of “not acquihire”?
hendzen 8y ago
Circle acquiring Poloniex changed the game. The rumored assurances from regulators that Poloniex's prior KYC/AML transgressions would be ignored as long as Circle fixed them going forward was all it really took. Now we are seeing a huge wave of M&A deals while Coinbase uses its very strong financial position to buy up the the less compliant but cashflow-rich overseas exchanges. In particular I wouldn't be surprised to see a huge deal such as Coinbase acquiring BitFinex/Tether at a greatly reduced price w/ some negotiated deal with US regulators to phase out Tether as long as holders can prove their Tether balances were acquired legitimately. That said, if trading is the killer app for Bitcoin/Crypto [0] in general - what is the point of this whole business? For example most of the genuinely innovative things I've seen on the ETH blockchain like 0x (the backbone of Paradex), dydx (decentralized derivatives) and related technologies or higher level platforms like relayers and decentralized exchanges involve trading. Which begs the question - what tokens are actually worth trading in the first place? Is all this value really justified by CryptoKitties? Just making HFT bots to trade around a bunch of monopoly money that is useless other than hype-driven speculation? I'm sure this could continue for way longer than I and other skeptics expect, as it already has before, but the whole cryptocurrency sector seems fairly irrational to me. And I say that as someone who was VERY interested/knowledgable about bitcoin during the 2013 bubble, to the point where I was hanging out on IRC channels like #bitcoin-wizards, discussing BIPs etc. [0] - https://tradingplacesnewsletter.com/move-over-crypto-enthusiasts-wall-street-will-take-it-from-here-5b5a9067bc5 https://tradingplacesnewsletter.com/move-over-crypto-enthusi...
- Shoue 8y ago
  I'm hoping DAG-based cryptocurrencies will be able to provide the transaction speed necessary for consumer transactions to be practical and we'll see stores actually take cryptocurrencies directly. If so, we'd just need someone ambitious enough to make the payment terminals and hopefully stores will see tiny/zero transaction fees as enough of an incentive to switch. To add to your list of points, I'd argue privacy is another thing crypto as a whole hasn't really taken seriously apart from a small set of cryptocurrencies. How many people want to dish out their address to stores when this implies they can see their history and with it way too much metadata like where you spend/earn, how much you spend/earn, and so forth.
wslh 8y ago
> The financial terms of the deal were not disclosed. Acquihire? It would be weird for Coinbase to take full advantage of a descentralized exchange because many of the tokens clash with regulations and even being decentralized makes Coinbase the owner and target for SEC.
- deleted 8y ago
  [deleted]
- patatino 8y ago
  Both coinbase and 0x have filed for regulations with the SEC. Will be interesting to see what the SEC decides. https://www.sec.gov/Archives/edgar/data/1735689/000173568918000002/xslFormDX01/primary_doc.xml https://www.sec.gov/Archives/edgar/data/1735689/000173568918... https://www.sec.gov/Archives/edgar/data/1735709/000173570918000001/xslFormDX01/primary_doc.xml https://www.sec.gov/Archives/edgar/data/1735709/000173570918...
thisisit 8y ago
I had to lookup what exactly Paradex was and it seems the platform is based on 0x. Given that decentralized exchanges have issues like front running, open arbitrage etc[0], I think this might not be a wise move. [0]: http://hackingdistributed.com/2017/08/13/cost-of-decent/ http://hackingdistributed.com/2017/08/13/cost-of-decent/
- patatino 8y ago
  Will Warren, co-founder of 0x addressed these topics in two blog posts https://blog.0xproject.com/front-running-griefing-and-the-perils-of-virtual-settlement-part-1-8554ab283e97 https://blog.0xproject.com/front-running-griefing-and-the-pe... https://blog.0xproject.com/front-running-griefing-and-the-perils-of-virtual-settlement-part-2-921b00109e21 https://blog.0xproject.com/front-running-griefing-and-the-pe...
pibi 8y ago
> While we work to integrate with Coinbase, the Paradex app will be temporarily unavailable, starting today, May 23, at 3pm ET. What's the point of a decentralized exchange if the frontend code can be shutdown at will?
- patatino 8y ago
  Your funds are safe! You can trade directly from your hardware wallet. Your money is never on the exchange. If a decentralized exchange shutdowns you can simply use another.
- fwdpropaganda 8y ago
  > What's the point of a decentralized exchange if the frontend code can be shutdown at will? You can have decentralization with respect to some components of the exchange and not others. In the case of Paradex it seems the point of decentralization is that you don't have to trust the exchange for custody. That's quite good by itself, even if they can shut down the frontend at will.
fwdpropaganda 8y ago
> That said, if trading is the killer app for Bitcoin/Crypto [0] in general I've had this thought myself. I think we can agree that most solid evidence points to Yes, trading is the killer app. Trading on something that has no intrinsic value. I.e. gambling. And hey, gambling is a legitimate killer app. The gambling industry is enormous.

163 points by iMuzz 8y ago

Awesome. Now people have hundreds more semi-anonymous tokens to which they can attach their personal information.

Paradex is a decentralized exchange that's built on top of the 0x protocol. DEXs are great because you can trade cryptocurrency pairs without trusting an intermediary (think Mt. Gox for why this is needed). This move shows that Coinbase is serious about building a decentralized trading platform (unless this is just an acquihire which would be very disappointing). Really exciting news!

joosters 8y ago
If there's no intermediary, what exactly have Coinbase bought?
- philfrasty 8y ago
  There is an intermediary in 0x called a relayer (receiving relayer fees) that brings together both buyer and seller through e.g. an exchange UI. Just the transaction itself does not require an intermediary and is therefore not prone to counter party risk (of course if buyer and seller knew each other before they could just skip the relayer).
- iMuzz 8y ago
  Sorry I was a little unclear in my comment. There is still an intermediary, they just never touch your funds.
cbHXBY1D 8y ago
Seeing as how Paradex isn't the most popular DEX and Coinbase's ties to 0x, I don't think this is an acquihire. This looks like they are actually going to use Paradex as a relayer.
- tstyle 8y ago
  Out of curiosity, why does “not most popular” imply higher chance of “not acquihire”?

hendzen 8y ago

Circle acquiring Poloniex changed the game. The rumored assurances from regulators that Poloniex's prior KYC/AML transgressions would be ignored as long as Circle fixed them going forward was all it really took. Now we are seeing a huge wave of M&A deals while Coinbase uses its very strong financial position to buy up the the less compliant but cashflow-rich overseas exchanges. In particular I wouldn't be surprised to see a huge deal such as Coinbase acquiring BitFinex/Tether at a greatly reduced price w/ some negotiated deal with US regulators to phase out Tether as long as holders can prove their Tether balances were acquired legitimately. That said, if trading is the killer app for Bitcoin/Crypto [0] in general - what is the point of this whole business? For example most of the genuinely innovative things I've seen on the ETH blockchain like 0x (the backbone of Paradex), dydx (decentralized derivatives) and related technologies or higher level platforms like relayers and decentralized exchanges involve trading. Which begs the question - what tokens are actually worth trading in the first place? Is all this value really justified by CryptoKitties? Just making HFT bots to trade around a bunch of monopoly money that is useless other than hype-driven speculation? I'm sure this could continue for way longer than I and other skeptics expect, as it already has before, but the whole cryptocurrency sector seems fairly irrational to me. And I say that as someone who was VERY interested/knowledgable about bitcoin during the 2013 bubble, to the point where I was hanging out on IRC channels like #bitcoin-wizards, discussing BIPs etc. [0] - https://tradingplacesnewsletter.com/move-over-crypto-enthusiasts-wall-street-will-take-it-from-here-5b5a9067bc5 https://tradingplacesnewsletter.com/move-over-crypto-enthusi...

Shoue 8y ago
I'm hoping DAG-based cryptocurrencies will be able to provide the transaction speed necessary for consumer transactions to be practical and we'll see stores actually take cryptocurrencies directly. If so, we'd just need someone ambitious enough to make the payment terminals and hopefully stores will see tiny/zero transaction fees as enough of an incentive to switch. To add to your list of points, I'd argue privacy is another thing crypto as a whole hasn't really taken seriously apart from a small set of cryptocurrencies. How many people want to dish out their address to stores when this implies they can see their history and with it way too much metadata like where you spend/earn, how much you spend/earn, and so forth.

wslh 8y ago

> The financial terms of the deal were not disclosed. Acquihire? It would be weird for Coinbase to take full advantage of a descentralized exchange because many of the tokens clash with regulations and even being decentralized makes Coinbase the owner and target for SEC.

deleted 8y ago
[deleted]
patatino 8y ago
Both coinbase and 0x have filed for regulations with the SEC. Will be interesting to see what the SEC decides. https://www.sec.gov/Archives/edgar/data/1735689/000173568918000002/xslFormDX01/primary_doc.xml https://www.sec.gov/Archives/edgar/data/1735689/000173568918... https://www.sec.gov/Archives/edgar/data/1735709/000173570918000001/xslFormDX01/primary_doc.xml https://www.sec.gov/Archives/edgar/data/1735709/000173570918...

thisisit 8y ago

I had to lookup what exactly Paradex was and it seems the platform is based on 0x. Given that decentralized exchanges have issues like front running, open arbitrage etc[0], I think this might not be a wise move. [0]: http://hackingdistributed.com/2017/08/13/cost-of-decent/ http://hackingdistributed.com/2017/08/13/cost-of-decent/

patatino 8y ago
Will Warren, co-founder of 0x addressed these topics in two blog posts https://blog.0xproject.com/front-running-griefing-and-the-perils-of-virtual-settlement-part-1-8554ab283e97 https://blog.0xproject.com/front-running-griefing-and-the-pe... https://blog.0xproject.com/front-running-griefing-and-the-perils-of-virtual-settlement-part-2-921b00109e21 https://blog.0xproject.com/front-running-griefing-and-the-pe...

pibi 8y ago

> While we work to integrate with Coinbase, the Paradex app will be temporarily unavailable, starting today, May 23, at 3pm ET. What's the point of a decentralized exchange if the frontend code can be shutdown at will?

patatino 8y ago
Your funds are safe! You can trade directly from your hardware wallet. Your money is never on the exchange. If a decentralized exchange shutdowns you can simply use another.
fwdpropaganda 8y ago
> What's the point of a decentralized exchange if the frontend code can be shutdown at will? You can have decentralization with respect to some components of the exchange and not others. In the case of Paradex it seems the point of decentralization is that you don't have to trust the exchange for custody. That's quite good by itself, even if they can shut down the frontend at will.

fwdpropaganda 8y ago

> That said, if trading is the killer app for Bitcoin/Crypto [0] in general I've had this thought myself. I think we can agree that most solid evidence points to Yes, trading is the killer app. Trading on something that has no intrinsic value. I.e. gambling. And hey, gambling is a legitimate killer app. The gambling industry is enormous.