by Joseph Young
At TechCrunch Sessions: Blockchain, Ethereum co-founder Vitalik Buterin heavily criticized the multi-million dollar listing fees of centralized crypto exchanges that often require tokens and blockchain projects to pay a significant sum of money to enable investors to trade their cryptocurrencies.
Buterin Criticizes Crypto-Exchanges
In an interview with Jon Evans at a TechCrunch event held in Switzerland, Buterin echoed a similar sentiment as Huang and many other small blockchain projects in the global community. Buterin heavily criticized crypto exchanges for demanding millions of dollars from projects to list them on their platforms with virtually no costs.
“I hope centralized exchanges go burn in hell as much as possible,” Buterin said, stating that projects should not have to pay $10 to $15 million in listing fees to enable investors in the public market to trade their tokens.
Buterin emphasized that in the future, decentralized exchanges will likely take over the crypto trading market, especially for crypto-to-crypto trades that do not involve fiat currencies.
Currently, because the vast majority of investors in the crypto-sector still hold large amounts of reserve currencies such as the US dollar or Japanese yen, centralized exchanges are necessary to help an influx of capital from the traditional finance market to move into the crypto market.
But, in the long-term, when sufficient capital is injected into the crypto-exchange market, Buterin explained that decentralized exchanges would be adequate.
“The fiat world only has centralized gateways,” Buterin said, adding that clear advantages of using decentralized exchanges such as privacy, absolute control over funds, and the elimination of third-party service providers that profit from fees will eventually drive users from centralized exchanges to decentralized trading platforms.
Higher Listing Fees Than Stock Markets
Roy Huang, an entrepreneur, based in China, revealed in early June 2018 that a top 30 crypto exchange in the global market had asked his team to pay hundreds of thousands of dollars to be listed on its platform. Given that significant crypto exchanges are said to list digital assets for $1 to $15 million, the listing fee required by the exchange which contacted Huang was not necessarily large.
However, Huang disclosed that the exchange proposed the initiation of fake bot trading and to inflate the volume of the token Huang’s team intended to launch to ensure it receives attention from traders on its platform, essentially implementing a strategy that would otherwise be illegal in the traditional finance sector that deceives investors on its platform.
Considering that the Nasdaq and the New York Stock Exchange, two of the biggest stock markets in the world, charge less than $300,000 as listing fees, and crypto exchanges charge significantly more than major stock exchanges.
“Just take a look at how many stock exchanges are out there in each country. Exchanges should either be completely decentralized DEX or government regulated organizations rather than profit hoarding startups trying to generate revenues for the next round of funding.”
Some DEX Already see Demand
IDEX, a decentralized exchange based on the Ethereum protocol, has already become the most significant decentralized application (dApp) on Ethereum with a daily volume of 2,924 ether, worth around $1.3 million as of July 2018.
As of current, decentralized exchanges are nowhere close to surpassing centralized exchanges in user activity or efficiency. But, as Kyber Network founder and CEO Loi Luu said, if decentralized platforms continue to improve on user interface and experience to ensure the process of digital trading assets in a decentralized manner is seamless, it will be possible for DEX to compete against centralized platforms.
“I think it’s because the UI isn’t good enough. The users aren’t familiar with the Decentralized Exchanges; they’re more familiar with Binance or Bittrex. So that’s why we wanted to make it easy for the user to use. So we don’t focus on the decentralized aspect of it. We focus more on the usability aspect of it,” Luu said, as BTCManager previously reported.