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Why should I launch an exchange when there are already hundreds of existing exchange? As a entrepreneur: Exchange services is very difficult to differentiate.

• tomhschmidt 7y ago
  If you want to list the same assets as everyone else with the same interface in the same markets, then yes, it's hard to compete. However, we see a world of tokenized assets coming online that will need unique markets for exchange. Something like Radar Relay (https://radarrelay.com/ https://radarrelay.com/ for ERC-20 commodities) is totally different from Veil (https://veil.co/ https://veil.co/ for prediction market shares) is totally different from BoxSwap (https://boxswap.io/ https://boxswap.io/ for trading collectibles). Even within ERC-20 commodities exchange, there are many different models of exchange within different markets that are sufficiently differentiated. We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product. The concept of "tokens" and "exchange" will become very abstract in the near future.
  • toomuchtodo 7y ago
    > We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product. One’s velocity should always be slightly less than their SEC defense attorney. If you're legit, take the time to make sure your paperwork is legit. https://news.ycombinator.com/item?id=18185701 https://news.ycombinator.com/item?id=18185701 (Top comment by Animats should draw your attention)
    • amingilani 7y ago
      Launch Kit is not an ICO or promoter, it's a platform for crypto exchanges. Could you elaborate why you're referring to a comment detailing the SEC going after ICO scams?
  • tacosx 7y ago
    I too can madlibs any noun in front of "blockchain" and try to start a pyramid scheme off of it, but the question is why?
    • homakov 7y ago
      There is no answer to this. Blockchain has no market fit, it does not appeal to masses, unfortunately.
    • deleted 7y ago
      [deleted]
    • rickycook 7y ago
      95% of blockchain projects are a garbage heap, crypto currency is WAY overvalued, but the 5% of projects that are actually useful, and have a real need for a blockchain may just fundamentally change parts of how we live life when micro transactions as a concept came to games, it changed the way people wrote games. when crowd funding became mainstream, it allowed more innovation from people with just a need and an idea don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death) *EDIT: and to be clear, i think the currency part of crypto currency is in the 95% not helpful (maybe unless you’re talking about stellar, which deals more with fiat/other currency exchange and for the most part eschews spending crypto currency itself)
      • egypturnash 7y ago
        > when micro transactions as a concept came to games, it changed the way people wrote games Has there ever actually been a case where microtransactions made for a better game? Everything I've read about what it's like working for studios that rely on them is creepy stories about trying to chase 'whales'.
        • aey 7y ago
          How do you objectively measure better besides revenue?
  • hrdwdmrbl 7y ago
    Not that I have any interest in launching an exchange, but I do see what you mean by the possibility of an exchange becoming quite abstract. If housing deeds are traded then a housing marketplace is an exchange. If cars ownership is traded then a car marketplace is an exchange. If in-game items are traded, it's an exchange. Could one think of stores as one-sided exchanges, where resale is just not natively possible? Does Google operate an ad exchange? Is iTunes an exchange? If digital goods ownership were on a blockchain then resale would be possible... What about physical goods?
• aakilfernandes 7y ago
  Different jurisdictions have different compliance requirements. Not sure, but my guess is the goal of this project is to allow regulatory arbitrage with a single unified interface.
  • Legogris 7y ago
    Capabilities to enforce regulatory compliance on permissionless chains is coming. You could, say, have zero-knowledge proofs in smart contracts that enforce that tokens representing security X can only be transferred if the receiving account has performed KYC and confirmed as an accredited investor in jurisdiction X, Y or Z, without leaking any PIIs that went Intl the verification. Or more trivially, TPL for account tagging. Microsoft's initiative on decentralized identity leveraging on the Bitcoin blockchains could be a component in this. Excellent podcast episode here: https://letstalkbitcoin.com/blog/post/what-bitcoin-did-107-microsoft-is-building-on-bitcoin-with-daniel-buchner https://letstalkbitcoin.com/blog/post/what-bitcoin-did-107-m... Not to say you're completely wrong, just that smart contracts can be used to enforce regulation rather than skirt it - like any tool the outcome depends on the intentions of the one wielding it. :)
    • CryptoPunk 7y ago
      I sincerely hope permissionless solutions make such permissioned solutions obsolete. There are people, who by accident of their place of birth, are not permitted to use permissioned financial systems.
      • Legogris 7y ago
        Yes. What many of the well-intentioned people (many with libertarian/cypherpunk/anarchist ideals) in the blockchain space are building now might become enablers of the perfect control system. Zero-knowledge proofs or RingCTs? Great, require disclosure and reporting of proofs or view keys to the man, who will enforce it for all interacting parties. "You can't enforce bans on running nodes"? Well, start enforcing strict control of the public IP space so everyone address has a responsible individual behind it and put severe penalties on unlicensed crypto/privacy enabled assets/what have you. I am thinking more and more we need to seriously consider moving the web to something like I2P or Freenet before it's too late.
• jamespitts 7y ago
  Answering why is up to you, the builder; differentiation is key to why 0x has created this protocol. "Tokens" can be a special kind of object which can be "exchanged" for other kinds of objects. It is not always about purchasing or swapping; this interaction can solve many different kinds of coordination problems. The exchange can create a context around users interacting via various types of tokens, enabling new kinds of services and communities to form. This could lead to enormous value for users.
  • arcticbull 7y ago
    > This could lead to enormous value for users. In what way? I think that was the parent poster's question. I think it's fair if we're going to be making huge broad-strokes claims we should at least attempt to justify them.
    • jamespitts 7y ago
      The properties of the general medium and of exchanges themselves would provide value if built upon. At the core of of the value proposition is the value derived from more efficient human coordination. - Giving certainty about the properties of the token asset to the user. Whether trading the exchange or in use at a service which accepts the token, the user verify what the token actually does. And what might change! Reduces risk of policy-change by owners and managers of services. - Giving control of the token asset to the users, or at least a verifiable level of control. Reduces risk of interference. - Securing the token asset, protecting the asset and related data. Reduces risk of loss. - Enabling easy integration or migration to other smart contract systems, due to token standards like ERC-20 and ERC-721. Reduces risk of vendor lock-in. Powers beneficial second-order effects. - Enabling composability. With primitives like various kinds of tokens and "exchange" addressed and standardized, new layers can be built, new configurations found. Creates value by reducing steps for users as they engage with each other within token-based smart-contract systems.
• Nursie 7y ago
  >> Why should I launch an exchange when there are already hundreds of existing exchange? Maybe you have the on-off ramps sorted out, a friendly bank and a regulatory environment, licenses, legitimate AML/KYC measures and can do it properly? While there are many exchanges already, how many can say they're that above board?
• nipponese 7y ago
  Think more broadly about what an "exchange" could be. You're thinking crypto forex, but consider a crypto-kitty bidding platform or a virtual game item marketplace.
  • Legogris 7y ago
    Or market for insurance policies. Or bonds. Or stocks. Regulation is clearing up and there are many biting at the bit for this. The disruption of financial markets may not happen tomorrow, but once it does it will go fast in each market. If there are more efficient venues, competitive market participants will start moving once they realize that they will be at a competitive disadvantage if they don't. When I say efficiency, I am not talking in technical terms and not necessarily on the kind of environments we see on public permissionless chains. So let's keep transaction finality and computational efficiency out of scope for a moment. Think of chains as subnets on the internet. The gaps will be bridged to allow seamless transfers between them. I've been wrong before but to me this is bound to happen. How many businesses in competitive areas have fax as a preferred method of communication today? Don't take what I'm saying as an argument in favor of buying ZRX tokens. I do think it's a cool project, albeit IMO could have done better without the utility token as an inherent component. But that's more about the business model than the tech. It will probably be another boom and bust before we see the leading protocols emerging.
    • arcticbull 7y ago
      > Regulation is clearing up and there are many biting at the bit for this. In what way is regulation actively harming your ability to purchase shares of a legitimate operating business without overextending yourself financially? Please be specific.
      • Legogris 7y ago
        By "clearing up" I mean that we are starting to see how regulation is being applied, not that it is being relaxed. I actually don't see how your question relates to what I wrote at all..? Sorry, English not native language etc. Please clarify if I wooshed. To clarify, many, especially investors, bigger businesses and financial institutions have been cautious because of regulatory uncertainty. There's still ways to go, but it's happening. The sky is far from blue but the wind is blowing, so to say.
• ForHackernews 7y ago
  > Why should I launch an exchange when there are already hundreds of existing exchange? Because loads of people will send you their money and tokens, you can keep them, and shut down your exchange. It's free money for bold entrepreneurs unburdened by legacy financial systems or consciences.
  • v64 7y ago
    The advantage of a project like 0x is that it's non-custodial, so this type of exit scam isn't possible.
    • arcticbull 7y ago
      Blockchain always finds a way to scam. Let’s give it time.
• Animats 7y ago
  Why should I launch an exchange when there are already hundreds of existing exchange? Because you can steal the assets, like about half of Bitcoin exchanges to date.
  • nostrademons 7y ago
    You can't with 0x, at least not in the way you could at say Bitfinex or Binance. All of the assets remain in your personal Ethereum wallet until a trade is matched up. That's the genius of the 0x protocol. The Relayers that LaunchKit lets you create are effectively just order books or other matching-engines that exist as a website or other service. They expose completed trades to the 0x smart contract, which atomically swaps the tokens of the trade. (Official 0x people can correct me here, I've done just a bit of research.) At no point does any organization other than you actually have control of your funds, nor can they receive them without giving you equivalent funds under the terms of the trade. I've said before that the real use-cases for blockchains will be in doing stuff that nobody in their right mind would want to do because it's currently foolhardy. This is a good example. Giving money to a fly-by-night exchange is foolhardy - unless you don't have to give money to them. And that's what 0x enables: tradable assets without trust.
    • deleted 7y ago
      [deleted]
    • nurettin 7y ago
      > That's the genius of the 0x protocol pretty proud that I stopped reading right here at the sales pitch to let you know that all coins are scams, every single person and group who tries to build a coin trading community using telegram is a scammer, there is no use for a blockchain in any foreseeable human endeavour or venue and it was all a big mistake. You may proceed.
      • nostrademons 7y ago
        I should bookmark this comment and we'll come back to it in 10 years. :-)
• deadmetheny 7y ago
  How else would you make money while Shitcoins as a Service are still hot?
• dcolkitt 7y ago
  > Exchange services is very difficult to differentiate. Because financial markets are very globally fragmented. The hardest part about opening an exchange is banking, clearance and KYC/AML. For example the chance that a citizen of say Benin or Uzbekistan could open safely and easily open an account at one of the major crypto exchanges is essentially zero. There's a lot of parts of the world where there's a captive audience with high demand for crypto trading, but no decent service available. There are pre-existing traditional brokerages and forex shops that have the local banking and KYC/AML infrastructure place, but don't have the tech for the exchange itself.
• repomies68 7y ago
  The market has ridiculous demand really, at times. But it highly depends on timing, location etc. And also resilience. If you run the exchange for long enough time, you will collect customers who will be coming back.
• baby 7y ago
  I'll give you my answer because I have a project which could have used this. I created a dapp that allows people to do [stuff] which generate some erc-20 token for users. They can then use this token to access special features on the dapp. It's easy to let users send and receive the tokens they have. But I want the token to have a value outside the dapp itself. Unfortunately I cannot get this token accepted on coinbase and other exchanges. Just because it is not important enough. I still want people to be able to sell or buy these tokens. The next best idea is to create a small exchange platform on my dapp: let people trade the token for ether or for other tokens. It's time consuming to code so I gave up. Now this is where this thing would have been great. Hope this helps.
• tacosx 7y ago
  This is how all pyramid schemes work.
• bartimus 7y ago
  It's there perhaps an angle with inter-exchange trading?
• treelovinhippie 7y ago
  What?! Build something that actually solves a real world problem in the blockchain scene? Madness. Blockchain scene: here's some shit to help you perpetuate hyper-capitalism and create artificial scarcity so you can, um, gamble (and inflate our own token).
• swinges 7y ago
  Re: Why launch an entrepreneur... There's actually several use cases here that are worth noting. As technology improves, more and more centralized crypto exchanges (where the majority of trading volume currently lies) are creating decentralized counterparts - yielding lower custodial risk among other benefits. Also, newer blockchains that don't have DEX's yet are completely untapped markets for developers. Lastly, there are a variety of different use cases beyond just an exchange that benefit from basic exchange templates: prediction markets, decentralized lending, etc. Disclaimer: I work for Hydro (https://hydroprotocol.io/ https://hydroprotocol.io/), a competing product.
• proy24 7y ago
  In a worldview where communities, orgs, products, countries, states, provinces etc. all have their own tokens, there will be need for niche, localized exchanges and 0x makes a lllot of sense.
• gridlockd 7y ago
  You have it the wrong way around. As a customer I want an exchange so that the tokens I buy have some liquidity, at least in theory. You're not going to be listed on an exchange initially and those exchanges that do list smaller tokens tend to be sketchy. As an entrepreneur, you figure out how your use-case benefits from tokens. For example, let's say you provide a product/service. You can sell tokens that can be redeemed for the product/service to investors at a "wholesale price". There's no need for tokens to go "to the moon", just to serve as a medium of exchange and ideally provide some margin to you and/or your investors. You could also offer a company ownership structure for tokens, but now you're in securities regulation territory, which nobody wants to deal with right now, at least at the moment. Of course a lot of crypto projects are garbage, just like most businesses fail and wipe out investor money in the process. The hype surrounding crypto certainly has massively underpriced risk, but the same could be said about stock like Tesla, Lyft or Uber.