One of VELIC’s flagship product is the exchange, which aims to provide a safe and transparent environment. Today, we can notice two main types of crypto exchange platforms — fiat crypto exchanges and pure exchanges. Which category does VELIC belong to? We’ll figure this out after reviewing the main principles behind each type.
Fiat Exchanges
Fiat exchanges allow traders to buy with fiat money, whether it’s the US dollar, European euro, the UK pound, Korean Won or Japanese Yen. This option enables some fiat crypto exchanges to provide additional payment and deposit options, like a credit card, bank wire transfer, and cash.
One of the most popular exchanges falling under this category is , the largest crypto platform operator in the US. Other relevant examples are Bitfinex, Kraken, and Gemini.
Pure Exchanges
Pure crypto exchanges, also called exchanges, don’t provide pairs that involve fiat currencies. As a consequence, they don’t handle traditional payment methods, whether it’s wire transfer or credit card. Instead, traders can buy in exchange for a base , like , , a stablecoin of some kind or a proprietary developed specifically for the platform use. In other words, you have to make your first deposit in rather than fiat.
The most popular exchange platform of this kind is -based . Most of the crypto investors there buy against or USDT. Thus, you’ll see crypto pairs like ETH/, LTC/, LTC/USDT, XRP/USDT, and so on.
When asked about how was the progress of developing a fiat crypto exchange, CEO Changpeng Zhao said:
“Fiat exchanges do take longer to set up because we actually don’t control some of the parts, especially regarding bank accounts, fiat gateways, etc. So, it’s a little bit tricky. It’s a lot more tricky than pure crypto because, with pure crypto, we control everything; the does not reject us… Things are coming along quite well.”
What Type of Exchange Does VELIC Provide?
Initially, VELIC users will be able to buy against five base coins, including , Ether, USDT, ICX, and VELT, the latter being the proprietary . Thus, VELIC is a pure exchange given that it allows crypto-to-crypto trades.
The goal of VELIC is to allow traders to focus on the process rather than being bothered with so many inconveniences that are typical for most of the crypto exchanges today. VELIC’s exchange infrastructure also integrates an over-the-counter (OTC) platform for institutional investor and the Initial Auction Offer (IAO) platform, which supports projects issuing for the first time.
Does Being a Pure Exchange Limit Potential?
You might wonder whether VELIC made the right step when it chose to develop a crypto-to-crypto exchange instead of building the infrastructure for fiat currencies as well. However, operating a pure exchange doesn’t imply any limitation. On the contrary, a carried out by CryptoCompare in 2018 showed that pure crypto exchanges had dominated the market, with an average daily volume of $4.7 billion in October 2018, compared to $2 billion daily volume recorded by fiat exchange during the same period.
Thus, the fact that VELIC is a pure crypto exchange doesn’t affect its potential at all. Users will be able to trade in a secure environment.
Published at Mon, 18 Mar 2019 03:15:56 +0000
