Personal experience with cryptocurrency trading helped Quoc Le and the team at QUANTA Chain develop a cross-trading architecture providing instant liquidity.
QUANTA Chain is a public blockchain infrastructure 15 times faster than Ethereum. It applies fast order matching to generate instant liquidity across different tokens and blockchains as it can incorporate any 132K ERC-20 token without listing fees, configuration or permission.
With a software development background at such companies as PayPal and Tango, Mr. Le knows a well designed system when he sees one, but early cryptocurrency trading platforms left him wanting.
“The early user experience was just horrible,” Mr. Le said. “It took a long time to trade , and its slow user interface was cumbersome.
For blockchain’s potential benefits within decentralized exchanges to be fulfilled, it needs to allow participants to transfer asset ownership without giving up custody in the process, Mr. Le said. Call it exchange version 3.0.
Version 1.0, aka the Mt. Gox era, was far from secure and had a bad user interface, Mr. Le said. 2.0 was an improvement but it forced users to choose between speed and security.
Version 3.0 brings transparency to centralized exchanges, Mr. Le explained. Who’s buying? Who’s selling? Who’s filling orders?
“The real evolution of 3.0 is an era of fair trading,” Mr. Le said. “The user doesn’t have to sacrifice speed, security or custody.”
The reason centralized exchanges have evolved the way they have is because they are designed to facilitate liquidity like stock markets, Mr. Le said. But the problem is that in order to have that speed, an intermediary has to take custody of the assets and that leaves them at risk.
Decentralized exchanges have their issues too, he added. Most are built on top of existing infrastructure like Ethereum with its 15-second trading latency.
The solution does not lie within the smart contract but through trading via the blockchain, and that is where the QUANTA Chain gets to work, Mr. Le said. The technology enables blockchain to blockchain transfers, so traders do not have to engage on an exchange. That is significant because there is little likelihood of getting the industry to agree on a united protocol.
Many cryptocurrencies work for the centralized exchanges which store them and not the owners, Mr. Le said. Exchanges look for other uses for the crypto sitting in their care such as funds and loans. That essentially makes them no different than the banks.
QUANTA’s infrastructure allows crypto owners to transfer coins to other owners without turning over possession to external sources, thereby addressing one of the concerns related to decentralized exchanges. And they also do it quickly. so the retail investor can compete with those employing automated tools.
“Transparency is also important,” Mr. Le explained. “Exchanges are often the only ones with access to the order book so only they know who’s buying and selling. Some exchanges trade themselves.”