After the collapse of FTX, cryptocurrency traders were looking for decentralized, non-custodial and more secure ways to execute orders and store their assets. This explains why some decentralized cryptocurrency exchanges (DEXs) are popular. phi saline solution It is gaining attention from investors even as venture capital firms across the board continue to move away from the digital asset industry.
Brine announces $16.5 million Series A at $100 million post-money valuation as investors sound bullish on new order book-based decentralized exchange. The DEX, whose “mainnet,” or fully operational network, was launched only a few months ago and has already amassed $500 million in trading volumes, according to statistics from starqueerthe Ethereum benchmarking solution powered by Brine.
DEXs, as the name suggests, only transact on the blockchain, unlike centralized exchanges (CEXs) that include consumer household names like FTX, Binance, and Coinbase, which Brine considers to be its closest competitor. Traders may choose DEX not only for full custody of their assets but also for the sake of privacy – CEX exchanges are usually required to go through Know Your Customer or KYC with local regulators, while regulations on DEX exchanges remain largely undefined Because there is no central party.
“Although it is the safest way to trade, many traders choose CEX to face high trading fees on DEXs, price slippage, transaction fees ($5-$25 per transaction), liquidity issues, absence of order book, transaction delays, and liquidity issue. “All things that can impact profit margins and dramatically increase the uncertainty of certain trades,” Sharan Lakshminarayanan, co-founder of Brine Fi, said in a response written to TechCrunch.
“With all these points in mind, we built Brine Fi to allow traders to experience the best of both worlds, having the benefits of DEX and CEX in the same place. Moreover, high-volume traders and institutions need not worry about frontal attacks anymore because we provide Complete order privacy using zkP (Zero Knowledge Proofs) technology powered by Starkware.
Order book and zero knowledge
That’s a lot of cryptocurrency jargon – the bottom line is that Brine has found a way to provide CEX benefits that are not usually available in DEX. One of these is the order book.
The order book, as in a traditional stock market, matches buyers and sellers on the basis of price and quantity. It allows types of orders not possible in DEX which are ideal for institutional traders as it allows them to better manage their positions under different market conditions and reduce slippage, and a different trade execution price than intended.
On the other hand, DEX platforms like Uniswap work on a completely different principle. Rather than matching buyers and sellers, DEX operations allow traders to exchange one type of asset for another by interacting with a pool of liquidity. So instead of being quoted by other traders, prices are determined by a mathematical formula used to maintain the total value of assets deposited by liquidity providers.
Brine says it’s also able to prevent “leaching” of traders by taking advantage of Zero-Knowledge Proof (ZKP), an encryption method that has recently gained traction as users look for more transaction privacy. This technique, which is a way to document the statement without revealing the statement itself, It allows the transaction to be verified on the DEX without revealing the details of one’s trading position.
The round was led by US-based cryptocurrency investor Pantera Capital, with participation from Elevation Capital, Starkware Ltd, Spartan Capital, Goodwater Capital, Upsparks Ventures, Protofund Ventures, and a number of angel investors.
Brine Fi builds for both retailers and enterprises, Lakshminarayanan said. For the former, it has introduced a beginner mode and signed a deal with liquidity aggregation platforms like 0x to enable people to start trading easily. The DEX exchange is going after institutions like cryptocurrency hedge funds that are looking to transition away from centralized exchanges, which currently drive a significant portion of their transactions. During the testing phase between February and June of this year, Brine claims to have processed 4 million transactions and exceeded a trading volume of over $1.6 billion.
“Over the past month, Brine has been able to execute orders in fractions of a second while remaining completely uncustodial. It has helped us join some of the largest hedge funds, exchanges and high-frequency traders in the world,” said Lakshminarayanan, who co-founded Brine with CTO Bhavesh Praveen. The world by helping them diversify their asset allocation and mitigate counterparty risk.” (CTO) and CDO Ritumbhara Bhatnagar.
Systems
With centralized exchanges such as Binance continuing to face regulatory scrutiny over their US operations and allegations of scrutiny of abuse and money laundering in the US. FranceDEXs also run the risk of misuse because they are not required to abide by any Know Your Customer (KYC) and AML (Anti-Money Laundering) regulations.
The founder suggested that regulations would require DEXs to compromise user identity, which is one of the appeals to users who prefer decentralized exchanges in the first place.
“DEXs represent an opportunity for unscrupulous bad actors to take advantage of the industry for the purposes of money laundering as well as other financial crimes. Since individual users do not need to verify their identity or the source of their funds when creating an account on a decentralized exchange, it is easier for them to slip under the radar than it is for institutions. For this reason, many industry experts believe that it is only a matter of time before decentralized exchanges find themselves subject to such regulation.
“With this in mind, it would be wise for decentralized exchanges to recognize the potential for regulation and start creating a framework for KYC and AML compliance should the need arise,” he added. “At Brine we already use providers like Chainalogy and Merkle Science to ensure we take “The best measures to protect ourselves from such nasty vectors.”