While the market capitalization of cryptocurrencies has increased exponentially in recent years, 2021 has emerged as an extremely favorable year for bitcoin (BTC), ether (ETH), and several other altcoins.
The market has undeniably gained momentum, with most coins shattering previous records and setting new all-time highs (ATH). However, data from a variety of sources point to a potentially concerning trend that could have long-term implications for the mainstream adoption of cryptocurrencies. According to a recent report by Glassnode, an on-chain market analysis firm, most exchanges are currently seeing modest outflows of around 20,000 BTC per month.
There could be a variety of reasons for the outflows, including appealing opportunities in DeFi or users’ growing distrust of third-party exchange providers. However, exchanges have done little to improve their image, while DeFi continues to grow. A convergence of centralized exchanges (CEXs) retaining control over users’ funds and private keys, as well as overly complicated fee structures, may be sapping interest in their services, particularly given the near absence of meaningful customer service.
Then there’s the growing issue of regulations, which has forced several exchanges to close down shops in various jurisdictions or limit their offerings. Aside from that, most centralized exchanges do not provide additional products or savings sources to help HODLers generate additional income from their assets. Similarly, decentralized exchanges (DEXs) face their own set of challenges, such as extremely complex user interfaces and persistent liquidity shortages.
As a result, several promising initiatives are being tested and deployed to assist users in getting the most out of their investments while adhering to all regulatory compliance policies. Take a closer look at two projects that are attempting to lower crypto’s entry barriers, overcome inherent disadvantages, and identify a path to simplify existing processes in order to facilitate the wider use of cryptocurrencies in real-world scenarios.
Getting the Most Out of Your Hodlings
CoinZoom, the most popular consumer-facing crypto exchange in the United States, is constantly launching new initiatives to promote the real-world application of cryptocurrencies in order to sustain the crypto craze. CoinZoom was quick to expand its global dominance by acquiring operating licenses in multiple jurisdictions, recognizing the growing demand for regulated and compliant crypto exchanges.
The platform is registered as a Money Service Business (MSB) in the United States and operates in all 50 states and territories. CoinZoom has also registered with AUSTRAC, the Australian governing regulator that grants financial exchanges the Digital Currency Exchange License, in order to expand its services to other countries.
Furthermore, the CoinZoom team intends to expand into Europe while waiting for the EU E-Money License and the US BitLicense to be approved. For the time being, however, CoinZoom has established a sister company, CoinZoom Europe Limited, which is registered in Ireland. CoinZoom currently supports users from over 140 countries and ensures KYC and AML checks for millions of customers.
Unlike most exchanges, CoinZoom offers a variety of crypto-centric services within its ecosystem, making it simple for users to spend cryptocurrencies in the real world. In addition to trading services, the platform provides an interest-bearing crypto savings account called CoinZoom Earn, a variety of CoinZoom Visa cards accepted at 53 million merchant stores worldwide, and a zero-fee remittance service called ZoomMe.
Another project, set to be released later this year, aims to solve the legacy issues that plague decentralized exchanges (DEXs). Ardana, which is built on the Cardano blockchain, is preparing to launch Danaswap, its decentralized stable-asset DEX and automated market maker (AMM). Ardana intends to use Danswap to enable highly capital-efficient trading between stablecoins and real-world assets, while also providing low-risk income to liquidity providers.
Ardana, which will be launched in early 2021, aims to be the first stablecoin-backed DEX to blur the lines between crypto finance and real-world finance in order to increase liquidity and stability. Danaswap, which is powered by the platform’s asset-backed stablecoin, dUSD (Ardana Dollar), will allow global users to gain greater control over their digital assets while also providing several substantial yield-generating opportunities.