Bitfinex to launch decentralised exchange for Ethereum-based tokens
Cryptocurrency exchange Bitfinex yesterday announced plans to launch a new trading platform for ethereum-based tokens, Coindesk has reported.
The new service, dubbed Ethfinex, would function as a decentralised exchange for tokens under the ERC20 standard, the company said in a statement. Bithfinex noted that a hacker attack it suffered last year and its subsequent efforts to compensate affected customers ultimately inspired the move.
On August 2, 2016, Bitfinex suffered a cyber-attack, in which 119,756 Bitcoins were stolen from customer accounts. In an attempt to reimburse stolen funds, the exchange issued a debt-based token called BFX, which was then distributed to affected users. Eight months later the company announced that it had bought back all the remaining BFX token, effectively reimbursing investors with US dollars.
In its yesterday statement, Bitfinex said that the issuance of the BFX token "proved a powerful lesson in the capacity of exchange decentralisation”, which ultimately inspired the new vision for Ethfinex.
“Spun out of Bitfinex, Ethfinex brings with it the vision of a customer-centric and highly liquid digital asset exchange platform,” Bitfinex explains. “Ethfinex will be a hybrid community and information hub for developers, traders and enthusiasts alike, designed to facilitate discussion, development and trading in the Ethereum ecosystem.”
The company’s long-term vision is to “move towards a completely trustless exchange, with gradual decentralisation of ownership to its community of users”.
The new exchange will feature its own token, dubbed the Nectar token (NEC), but it won’t be used as a crowdfunding instrument. Instead, it will be distributed to market makers as a kind of loyalty point, which can be redeemed for a percentage of trading fees each month.
The token will also be used to advise on governance decisions. According to the Ethfinex white paper, users that hold five percent or more of the total amount of NEC tokens will in time have the ability to elect members of an advisory board.
The document also reveals that NEC trading will be limited to those who elect to register with the market-maker loyalty initiative. US residents will not be allowed to join the programme or conduct trades in the exchange's NEC marketplace.