February 14, 2023 | BY OSMAN BAH (The Advisor)
The Future Is Hybrid
Cryptocurrency exchange is one of the largest sectors of the crypto industry. The market for cryptocurrency exchange platforms was valued at USD 30.18 billion in 2021, and from 2022 to 2030, it is anticipated to expand at a compound annual growth rate of 27.8%. Although crypto is a very young industry, it has grown in global popularity and adoption at an unprecedented rate. Just like the dot.com era before it, this tech boom did not come without casualties.
How it started
Beginning with the emergence of new blockchains with a variety of characteristics, the ICO bubbles—which brought a significant quantity of cryptocurrency onto the market—began to get a lot of attention. Cryptocurrencies began to appear everywhere, and exchanges were also established to trade them. If you're interested in trading cryptocurrencies, there are now roughly 500 exchanges to select from at the time of writing this. Not all that glitters, however, is gold.
If you've been paying attention to the market, you've probably heard tales of people losing money on crypto exchanges and lending platforms. Many brand-new decentralized projects will begin with the pledge to effect change. Initial coin offers (ICO) for brand-new crypto start-ups that don't deliver on their promises were a common topic of conversation. Anonymous actors stole money from users. As a result of the lack of oversight and restrictions, crypto exchanges eventually gained a negative reputation. New methods of operation also began to emerge from Centralized Exchanges (CEX). This provided a moment of ease but soon the general public's perceptions continued to diminish. Cryptocurrency exchanges quickly gained a reputation for being high-risk ventures and scam projects. Here is why.
How it fell
The blockchain-based cryptocurrency that was designed to be transparent couldn't keep up with the demands of the expanding economy. For the major firms who wanted to participate in the market, Decentralized Exchanges (DEX), which handled transactions on the blockchain, were too slow. Centralized Exchanges, which shift transactions off-chain, were thus introduced as a rapid fix. The market was made more attractive by additional features like user-friendly interfaces and regulatory processes like KYC/AML, but this also meant that clearing houses and third parties would now be responsible for executing transactions that were initially intended to be on-chain.This resulted in a blurring of the barriers between traditional institutions and the intended crypto revolution. Following the global crisis and the start of the bear market in 2022, CEX began to deteriorate as leading exchanges began declaring bankruptcy due to insolvency. Investors began to lose faith as the industry tumbled in the bear market. They grew weary of hearing about people losing money due to mismanagement and lack of accountability. The crypto business needs a reset button in situations like this. Biokript has an answer.
For a few years now, the term "hybrid" has been thrown about in the cryptocurrency community. The topic is discussed in tiny circles, but it is seldom used to its fullest extent. While addressing the larger issues, Biokript doesn't overlook the specifics that have an impact on the sector. The principles of bitcoin are not abandoned; rather, Biokript upholds them while adapting them to the times. Knowing that decentralization is essential, the exchanges framework must continue to be based on a peer-to-peer network. The user is able to connect directly using their decentralized wallets and conduct quick trades with the help of aggregators. These are nodes that are established across several exchanges and promptly match orders with adequate liquidity. This functionality addresses the issues with transaction processing time and liquidity that are often related to DEXs.
Biokript will be able to create a balanced environment by putting the security and vetting components of CEX into practice. Its objective is to thoroughly examine projects that are interested in being listed on the exchange. Being shariah compliant, Biokript will ensure that everyone is protected from fraudulent projects and has the flexibility to trade without being constrained by the usage of interest. In order to comply with legislation, Biokript will implement an AML/KYC policy with the eventual introduction of FIAT currency. Everyone will have the opportunity to participate in what is thought to be the most lucrative area of cryptocurrencies thanks to this hybrid strategy.