Last week, more than 3,000 blockchain engineers, thinkers and investors descended on the city of Prague for the 4th Annual Ethereum Developers Conference. The ethos of an open financial system was on full display as everyone came together to ideate on and solve some of the toughest challenges facing Ethereum and blockchains today. Here’s a quick look at some of the highlights from our week.
DeFi Summit
We kicked off the week at DeFi Summit, the second event in a new series hosted by a number of startups building the new decentralized financial infrastructure. Alex Kern of ’s identity team and Ron Bernstein of gave a presentation called, “The Future of Permissioned Relays”. They talked about how relays could incorporate certain KYC elements and enable the trading of permissioned assets like securities. The presentation included a cool demo that showcased how Paradex, a relay product, could one day make use of this utility.
“Future of Permissioned Relays” Talk (L-R): Alex Kern (Coinbase Identity), Ron Bernstein (Paradex)
We also hosted a conversation called, “How Stablecoins Unlock an Open Financial System,” led by Emre Tekisalp, Business Development Lead on . Stablecoins, like , are essentially programmable money that is easy to send to friends, use in applications, and store on your device without needing a bank account, while also protecting users from the volatility we see in cryptocurrencies such as bitcoin.
They’re becoming a critical piece of the decentralized financial system that we believe will open the door to better tools, access and user experiences. We had a great discussion with attendees on what we can focus on in the short term to get stablecoin-friendly products into the hands of millions of people.
“How Stablecoins Unlock an Open Financial System” Talk: Emre Tekisalp (Coinbase Wallet)
We wrapped up DeFi with a panel on security tokens where Ron Bernstein represented Paradex and shared thoughts on why security tokens and decentralized trading tech stack is a more efficient way to trade securities and, more importantly, what some of the key pieces we’re working on to make this a reality.
Security Token panel (L-R): Ron Bernstein (Paradex), Connor Spelliscy (Zeppelin), Robert Bent (Ethereum Foundation), and Thomas Borrel (Polymath)Devcon4
Devcon is the main annual conference for developers building the Ethereum blockchain and applications on top of it. Over four days, attendees had the opportunity to learn from leading figures in the space, discuss technical challenges, collaborate on new creative solutions, and meet new folks. Everyone in attendance seemed to agree that this year’s event was a huge success, both in terms of content, organization and production value. Huge kudos to the Ethereum Foundation and all volunteers for putting on such a successful event for the crypto industry!
Devcon kicked off with Day 0 and a UX Workshop called, “Designing for Humans,” hosted by Coinbase’s Director of Design, Connie Yang and IDEO CoLab’s Tara Tan. It was incredibly energizing to see so many people thinking about how sound design is necessary to make highly technical applications useable. It shows that we’re at the stage of the maturation cycle for crypto where developers want their products to be easy and intuitive to use. Perhaps a leading indicator for a larger number of widely used products coming in a few months, it was great to see UX become an official track all throughout the conference.
“Designing for Humans” Workshop (L-R): Tara Tan (IDEO), Connie Yang (Coinbase Design)
The next day, Sid Coelho-Prabhu, Product Lead for , gave a widely attended talk titled “Getting to a Million Dapp Users.” Decentralized apps (DApps) are recognized as one of the main ways in which crypto and blockchains will be used by millions of users, but we’re not quite there yet. He covered some of the specific challenges the industry needs to tackle in order to bring these tools to more users. He highlighted finding the right use case, useability of dapps, and increasing scalability as the three key challenges. He also talked about what we at Coinbase Wallet are working on to help with these issues and get the millions of users through the gateway.
“Getting to a Million DApp Users” Talk: Sid Coelho-Prabhu (Coinbase Wallet)
Our next talk was on how Coinbase safely handles detecting contract transfers on Ethereum for its millions of users everyday. Coinbase’s Jake Craige shared some of our learnings from the past years and best practices with the audience in a session called “Smart Contracts: Approach with Caution.” Running such an operation at this scale truly leaves some battle scars and we’d like to make sure others learn from our mistakes and have a far easier job!
“Smart Contracts: Approach with Caution” Talk: Jake Craige (Coinbase Payments)
We wrapped up the week with a panel titled, “Integrating Ethereum at Scale,” hosted by Coinbase’s Eric Scrivner and Jake Craige. Along with the other panelists, Morgan from ShapeShift and Ben Chan from BitGo, we covered the biggest challenges for companies running large scale operations and mitigations. It was a deeply engaging conversation for the panel and the audience.
Integrating Ethereum at Scale panel (L-R): Eric Scrivner (Coinbase), Morgan (Shapeshift), Ben Chan (BitGo), Jake Craige (Coinbase)
It was a blast to be at Devcon this year! The event served as another reminder that there are a lot of amazing teams and minds building in this space. Crypto may have a lot of big and hairy technical challenges ahead of it, but we have no doubt that the community that’s forming will tackle and solve them one-by-one.
Our Coinbase Wallet team was happy to meet new folks and old friends at our Devcon booth
We also hosted a fun happy hour. Huge thanks to everyone who stopped by!
We hope to see everyone again next year. Thanks for coming by, saying hi, and creating an open financial system with us! If you’re as energized about this new financial future as we are, come help us build it. We have openings across the board, so be sure to check out our .
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We wanted to follow up with our customers about the launch of bitcoin Cash on GDAX. Despite our best efforts to create a fair and orderly market, the launch did not go as expected and we understand why many of our customers and members of the community are upset. To provide transparency, we wanted to share a detailed timeline of events, additional information about the decisions we made, and our thoughts about improving future launches.
Decision to Support bitcoin Cash
On August 3, 2017, we our intention to allow customers to withdraw their bitcoin Cash (BCH) balances by January 1, 2018. While we committed to supporting BCH withdrawals at that time, we delayed our decision whether or not to support BCH trading to a later date so we could better assess the health of the bitcoin Cash network and evaluate BCH using our .
Over the following months we monitored the bitcoin Cash network. We observed factors such as network security, developer support, and customer interest in order to assess network health. We also evaluated BCH using our Digital Asset Framework, considering factors such as BCH’s existing global trading volume against Sect 4.1 “Liquidity Standards” and Sect 4.2 “Global Distribution”. We concluded that bitcoin Cash met the standards in our Digital Asset Framework to be traded on GDAX.
On November 13th, 2017, employees were notified of the decision to support BCH trading and were explicitly prohibited from buying and selling BCH. All employees were also barred from sharing this information with anyone outside of Coinbase. This approach is modeled after best practices at other financial institutions and captured in our .
Launch of BCH Trading
We announced our decision to support BCH trading on December 19, 2017. The following outlines the timeline of events that occurred:
December 19, 2017
4:06 pm PST: We that GDAX would enable support for BCH trading on three new books: BCH-USD, BCH-EUR and BCH-BTC. In accordance with our these books opened in ‘post-only’ mode. This mode allows orders to be placed but not filled — establishing liquidity, encouraging price discovery, and mitigating the risk of a volatile market opening.
5:15 pm PST: We our intention to enable trading on the BCH-USD book at 5:20pm PST. We made this decision based on the BCH-USD book achieving a minimum liquidity target needed to enable trading.
5:20 pm PST: The BCH-USD book for active trading and orders began to be matched.
5:23 pm PST: We trading on the BCH-USD book due to significant volatility caused by heavy market buy demand that resulted in insufficient liquidity.
In the 2 minutes and 40 seconds the BCH-USD book was open for trading:
4,443 orders were placed3,461 matches occurred2,202 market orders executed$15.5 million USD of trading volume occurred
During this period, nearly 90% of all market orders were buy orders. This resulted in a thinning of liquidity and a rapid increase in price on the BCH-USD book.
The chart below displays the number of market buy vs. market sell orders in 6 second intervals. The BCH-USD price increases closely correspond to periods where market buy orders represented nearly 100% of market orders.
Market Buy (blue) and Market Sell (red) orders vs. BCH-USD price on GDAX from 5:20–5:23pm PST on 12/19/17
6:30 pm PST: We that the BCH-USD, BCH-EUR, and BCH-BTC books would move to ‘cancel-only’ mode and all open orders would be cleared. The BCH-EUR and BCH-BTC books never achieved our liquidity minimums needed to enable trading so no trades ever occurred.
December 20, 2017
8:56 am PST: We our intention to open the BCH-USD, BCH-EUR, and BCH-BTC books in ‘post-only’ mode. We also adjusted the liquidity minimums needed to enable trading based on the previous day’s market behavior.
11:00 am PST: We trading on the BCH-USD book. This market has been operating in an orderly manner since this time.
7:41 pm PST: The BCH-EUR and BCH-BTC books failed to achieve our liquidity minimums needed to enable trading. Both books were moved to ‘cancel-only’ mode and open orders cleared.
December 21, 2017
7:01 am PST: We the BCH-EUR and BCH-BTC books in ‘post-only’ mode.
3:37 pm PST: The BCH-EUR and BCH-BTC books failed to achieve our liquidity minimums needed to enable trading. Both books were moved to ‘cancel-only’ mode and open orders cleared. We our intention to disable the BCH-EUR and BCH-BTC books until after the holidays when there would be a higher likelihood of meeting liquidity standards needed to enable trading.
Announcement Strategy
We are committed to building the world’s most trusted digital asset exchange and we approach the process of supporting a new asset seriously. This is especially true when deciding to support an asset that is created from the fork of an asset already supported on GDAX. For example, we believe it’s important to minimize potentially disruptive events while customers do not have access to the forked asset. This belief drove our decision to announce our support for BCH trading only once all customers had access to their BCH.
Looking Ahead
Our mission at Coinbase is to create an open financial system for the world. As we work towards that mission, we will continue to improve our product and processes and welcome customer feedback. You can reach out to us via or at support@gdax.com.
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We wanted to give our customers additional information about our process for adding new assets to our exchange. We are committed to being the most trusted and easy-to-use digital asset exchange and believe sharing this process with our customers is an essential part of building that trust.
A few months ago we released our which highlights the factors we evaluate when considering which new assets to support. A committee of internal experts is responsible for determining whether and when new assets will be added to the platform in accordance with our . These individuals — and all employees at Coinbase — are subject to confidentiality and trading restrictions. We will only announce the addition of new assets via our blog post or other official channel.
As of the date of this statement, we have made no decision to add additional assets to our exchange. Any statement to the contrary is untrue and not authorized by the company.
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We’re happy to announce that bitcoin Cash (BCH) is now listed and available for trading on GDAX.
We made the decision to list BCH by considering such factors as customer interest, developer support, network security, market capitalization, trading volume, and our . You can read more about bitcoin Cash on our .
The following order books have been created and will remain in post-only mode until there is sufficient liquidity for trading:
BCH–BTCBCH–USDBCH–EUR
bitcoin Cash was created by a fork of the bitcoin network on August 1st, 2017. All customers who held a bitcoin (BTC) balance on GDAX at the time of the fork have been credited an equal balance of bitcoin Cash (BCH) in their GDAX account. Your BCH balance will reflect your BTC balance at the time of the bitcoin Cash fork, which occurred on August 1, 2017 at 13:20 UTC (block #478559). You can read more about what a bitcoin fork is and our previous update on bitcoin Cash .
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