Crypto Exchangers: A Growing Role in the development of the DeFI Space
The development of the DeFI Space has been growing at a rapid pace from the inception of Bitcoin in 2011 to the optimization of Web 3.0 and Artificial Intelligence in 2023. With thousands of innovative projects and a user count that is pushing to 400 Million, it is predicted that the DeFI Space will have a Market Value of $10 Trillion and standing tall from other asset classes. In this growth trajectory there is a huge role that Exchanger Platform may hold in turning this prediction into a reality. So what is an exchange platform and why are they so vital for the growth of the DeFI Space?
Exchanger Platform — What is it? How do they work?
As the adoption of the DeFI Space continues to grow, “Exchange” is a word you hear quite often within the community. Every project aspiration is to be listed on an exchange platform and introduced to a global community while users obtain their favorite digital asset from it. While Exchange is a term that is not specific to the DeFI Space, it was a new term for the community if you flashback to the early inception of Bitcoin around the 2010s.
We all know that Bitcoin was a revolutionary concept that was introduced during the 2008 Financial Crash but nobody knows its real value despite its uniqueness. Some think it’s a worthless number on a screen while others managed to convince a pizza store to accept 10,000 of these coins in exchange for 2 pizzas. Clearly the supply of Bitcoin was huge as people were mining it during its spare time but nobody wanted it as people didn’t yet realize its value.
Digital Asset was a new thing in the early 2010s while people still think that Bitcoin are no different to the points you earn by playing a game. This all changed when Bitcoinmarket was launched on 17th of March 2010 where Bitcoin was first listed at a price of $0.003 and users can exchange $1 through Paypal for 333 Bitcoin on the site. This essentially becomes the first ever time where a Bitcoin trade happens and Bitcoinmarket becoming the pioneer for Digital Asset Exchange.
Around the same time with the success of Bitcoinmarket and disappearance of Paypal from the DeFI Space, more exchange platforms started to come up to fill in the demand. Bitstamp and Mt. Gox was amongst the few notable ones but while Bitstamp managed to establish themselves as the oldest Exchange Platform in existence, it’s the latter managed to grab the headlines and attention of the DeFI Space for all the wrong reasons.
Mt Gox was a Tokyo based Exchanger Platform that rose to dominate the Market Share of Bitcoin trade at more than 70% during its peak. It is a platform infamous for losing more than 850,000 Bitcoin worth over $23 Billion in today’s value during a supposedly hacked in 2014. Most of these Bitcoins were never recovered and this still remains one of the biggest downfalls in the DeFI Space. The case with MT Gox put the spotlight on DeFI Space by every regulator and encouraged stricter regulations on how these platforms operated.
The fall of Mt. Gox also gave rise to a new Exchange Platform to fill in the huge void left and ensure that the DeFI Space continues to operate. Some of these platforms are what you know today such as Coinbase, a publicly listed company founded in 2012 and the biggest exchange platform founded in 2017 which is Binance. Currently there are more than 1000 of such Exchange Platform and their number continues to grow as the adoption continues.
So what is an exchange platform exactly?
Exchange Platform are firms or institutions that facilitate the trade of digital assets within the DeFI Space. These trades could be carried with a fiat currency or with other digital assets that are supported by the platform. Exchange platform essentially acts as a binding force within our traditional system and the new defi space in order to generate a smooth adoption of digital assets.
How do you join the Exchanger platforms?
You can basically visit their Website or the Mobile Application and sign up for a Wallet Account on the platform. These Wallets will then be your tool to deposit your fiat currency into the platform and purchase any digital asset that are listed within the marketplace. You can also participate in other services within the platform such as Launchpad or ETFs according to your preferences.
These Exchange platforms may be a popular term within the DeFI Space but not always for the right reason. Exchange platforms also hold and store a lot of people’s digital assets on their hands and any mishap experience by these platforms may cause the entire DeFI Space to be ruptured. Mt Gox caused quite a shock and distrust within the DeFI Space when it fell in 2014 but it was nothing compared to FTX in 2022. FTX the third largest crypto exchange collapsed with more than $8.9 Billion in customer assets lost leaving a permanent scar in the DeFI Space.
Exchange Platform holds a huge role within the DeFI Space and that is why it also shoulder a huge responsibility to steer it to the right way. Although not all of this responsibility may translate towards success in the market but it is important to consider the DeFI Spsce be without them. With Digital Asset pushing toward a recovery and adoption at an all time high, its role becoming more vital in the development of the space.
Why are they vital in the DeFI Space?
Imagine a world where you own Bitcoin but you don’t really know what its value is, you would probably resist in collecting these Digital Assets as it does not add any value to your daily life. Bitcoin and other Digital Assets are valued highly because there are a lot of people like yourself that are willing to trade it for you in exchange for currencies that you can use in your daily life. Exchange is basically this platform where buyers and sellers can gather one spot and agree on the right value for a digital asset. If there is no trade then there is no value to assess.
This trade between buyers and sellers are what lead to all time high on its value and generate interest from the worldwide community in the DeFI Space. This community is what then pushed the innovation of the space and led the new ideas to reality such as the success of Bitcoin lead to the creation of Ethereum, a blockchain network that expanded on the capability of the original. These innovations then drive more value into the space creating a feedback loop of growth.
Its role as the bridge within the DeFI Space and our daily lives also serves as a vital platform to enforce regulations. Exchange Platform is the on ramp platform for most users who would like to join in to the DeFI Space and this facilitates the perfect platform to enforce new regulations. This feedback from the exchange platform could then be provided to regulators to shape the regulation in a way that protects the well being of the community.
Lastly the most important role that the Exchange platform holds is to foster and nurture new innovations so that it has the right support to make it into a reality. Exchange Platform through its launchpad services provide the necessary tool for innovation to keep ongoing within the DeFI Space and pushing the boundaries of what was thought possible 5 to 10 years from now. It ensures the well being of the DeFI Space is kept intact as the community continues to grow.
We in Nagaya Technologies Pte. Ltd believe that innovations and ideas within the DeFI Space should be nurtured and allowed to take shape. That is why we decided to innovate the original idea laid out by the other digital asset before us and introduce a hybrid concept. Nagaya is the world’s first hybrid digital asset that is partially backed by Gold to protect its intrinsic value and subsidiary projects to allow its value to grow sustainably over time. For more information regarding the latest updates on Nagaya and our whitepaper, you can visit us at nagaya.io
Or you can obtain your Nagaya now through the Launchpad Platform at latoken.com/ieo/NGY
