Enhance exchange liquidity and CX with instant BTC & BCH deposits
The exponential growth experienced within the cryptocurrency economy over the past five years has largely been driven by the explosion in the number of exchanges, which enable cryptocurrency trading, and crypto-mining.
Various innovative enterprises that cater to the demand for these services have launched during this time, with a significant number growing from startups to billion-dollar ventures within just a few years.
Cryptocurrency exchanges, in particular, are in the midst of a boom phase, with hundreds of millions of dollars in value traded on a daily basis across the various decentralized and centralized exchange platforms. According to Bitcoin.com, over 500 exchanges are currently in operation, with more added on a weekly basis at present.
With interest in cryptocurrencies on the rise, especially as their appeal and application grows within the mainstream investment market, the demand is also increasing for more sophisticated, advanced and user-friendly services.
However, for both custodial and non-custodial exchanges to encourage and accommodate greater trading volumes and thereby generate more revenue, it is essential that two pertinent challenges be addressed. These include the need for increased liquidity, and an enhanced customer experience (CX) that does not compromise user security.
In their quest to provide a secure service, most exchanges generally wait for at least six confirmations before processing a transaction (TX). This helps to mitigate double spend by validating deposits. However, although waiting for six blocks to confirm is a prudent standard from an exchange perspective, it seriously compromises the CX.
Traders don’t want to wait for 10 minutes before their TX is finalized, and it can take even longer for funds to be transferred between accounts. They also want reliable, secure and safe services that offer seamless functionality. With so many exchanges currently in operation, those that fail to deliver on this value proposition will quickly lose their relevance and appeal.
As it relates to liquidity, this delay in confirming and processing transactions also means exchanges hamper the natural flow of cryptocurrencies between buyers and sellers. Without adequate liquidity, activity on the exchange slows, and the resultant pent-up demand also places strain on the exchange, further compromising the CX.
In the search for a substantive solution to these and other common impediments to a seamless and streamlined experience, a number of innovative solutions have been developed by forward-thinking start-ups, and this list includes GAP600.
The GAP600 solution facilitates instant, risk-mitigated cryptocurrency commerce by enabling cryptocurrency exchanges to recognize unconfirmed (0-conf) Bitcoin and Bitcoin Cash transactions as final. This is made possible through GAP600’s proprietary risk engine, which analyzes and performs live risk scoring for each transaction as it reaches the mempool. This enables GAP600 to guarantee cryptocurrency payments before they reach the blockchain.
This functionality is revolutionizing the speed of cryptocurrency exchange transactions, which address both the liquidity and CX challenges that currently afflict the sector. By enabling instant and secure cryptocurrency trading, traders will no longer need to wait for confirmations, which means liquidity enters exchanges quicker. It also enables traders to trade arbitrage opportunities, which further improves liquidity.
In terms of enhancing the CX, GAP600-enabled instant transactions ensure there’s no frustrating delay as traders watch and wait for a deposit to confirm. The added value of implementing a secure service like GAP600 on the exchange platform adds to the peace of mind that every provider wishes to convey to their traders. It creates the impression that the exchange and its management consider the security and safety of a trader’s funds to be a high priority. This helps to craft a compelling value proposition and point of differentiation in an increasingly cluttered marketplace.