Will decentralized exchanges be the next generation of crypto exchanges?

 
It’s no secret that the cryptoworld has been plagued by attacks. As of March this year, more than US$15 billion worth of bitcoins have been stolen from exchanges. Just last month, South Korea’s second-largest cryptocurrency exchange Bithumb was hacked, leading to a sharp drop in the price of virtual currencies.

Centralized exchanges (CEXs) have been facing heat from leaders in the crypto field, to the extent of Ethereum creator Vitalik Buterin even calling “centralized exchanges [to] go burn in hell”.

What’s a solution to increase security on the blockchain? Decentralized exchanges (DEXs). Because there’s no central point of attack, DEXs are more secure compared to CEXs.

With a CEX, users usually put their coins in cold storage, or third-party wallets to keep them secure, but this would lead to longer withdrawal times. Through a DEX, users can access their coins as soon as trades are complete.

Ethereum wallet imToken raises US$10 million Series A

One such company that work with DEXs and lets customers to store coins locally on their mobile devices is imToken. The app allows users to store, send, and receive cryptocurrencies while maintaining control over their private keys and accounts. Though there are limitations such as being unable to offer investment plans services, the app is less vulnerable to hacking attacks as it doesn’t store users’ coins directly.

The imToken team. Third from left: CEO Ben He. Photo credit: imToken.

Established in May 2016, imToken is one of the first cryptocurrency wallet apps that supports the Ethereum blockchain. Users can manage and trade cryptocurrency within its platform. The company claims to be the world’s largest ethereum wallet, supporting 30,000 tokens, with its software reaching over 4 million monthly active users from more than 200 countries. Last year, it handled US$35 billion in pass-through transactions.

IDG Capital, an early investor in technology giants the likes of Tencent, Baidu, and Xiaomi, backed imToken with US$10 million in its Series A funding in May 2018. The investment firm also took part in Coinbase’s US$75 million Series C round, and Circle’s US$50 million funding. imToken plans to use its funds to add new features such as support for Bitcoin, EOS and other blockchain cryptocurrencies.

Features of imToken

One of imToken’s main features is its cold wallet with offline signature function. Users’ private keys are stored securely in an offline device, coupled with another online device to broadcast transaction. This reduces the risk of private key theft over the internet.

Furthermore, real-time market updates from global major exchanges such as Coinbase, Binance, Bittrex and more can be tracked through the app. Users are also able to customize alerts, which allows them to keep up with significant market movements the moment they occur.

Launch of Tokenlon Decentralized Exchange

Beyond imToken wallet, the company also launched Tokenlon – in partnership with Kyber Network and 0x – earlier in April this year. The DEX has a marketplace for decentralized mobile apps. Tokenlon also allows developers to collaborate on the development of DApps, bringing a more holistic digital asset management experience to its users.

Tokenlon supports token-to-token trading on users’ mobile devices. Two months ago, in conjunction with Kyber Network, imToken also rolled out the Instant Exchange function, a service where the Kyber Network protocol selects the best exchange rate across multiple reserves within the network for token-to-token conversion within a fair market price.

Are decentralized exchanges the future of crypto trading?

On July 31, imToken will be having a launch event for imToken 2.0, introducing features such as the multi-chain wallet backup and DApp browser. They are also looking to move their global headquarters to Singapore to expand their global reach and hire more technical staff for product development.

On top of that, there will be a panel discussion, where top trading projects and experts from Kyber, Digix, Maker and Amber will weigh in on the pros and cons of DEXs.

To keep updated with imToken’s happenings, follow them on Twitter or Medium.