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Fordex: Building a stablecoin exchange platform


Satoshi&Co Daily Crypto Newsletter

January 31 · Issue #117 · View online

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Check out past issues of the newsletter along with more interesting crypto content as well as short (but great) conversations with leading crypto industry participants at our newly-launched website

(Chinese wall break alert! We interrupt regular programming today to announce the launch of Fordex, the world’s first stablecoin focused relayer, launched by ZPX, the company that publishes the newsletter)
Profusion of Stablecoins:
Enough has been said about the extreme volatility of cryptocurrencies and how it hinders the broader real-world adoption of cryptocurrencies. Bitcoin’s store-of-value and uncensorable medium-of-exchange propositions are vastly undermined by its huge price swings. Any asset that fluctuates by 20% in a single day cannot become a reliable instrument for either of the above use cases (SOV or MOE). If the maximalists are to be believed, the extreme volatility of cryptocurrencies can be attributed to the speculative nature of the asset class and the volatility will subside once investors truly grasp the benefits of the utility aspects of cryptocurrencies. On the other side, crypto detractors posit that the high fluctuations in crypto asset prices will never lead to real-life adoption of cryptocurrencies. Therein lies the core conflict; More adoption curbs volatility but high volatility curbs adoption.
This is why stablecoins are important. Besides the arbitrage use case, stablecoins could potentially pave the way for mainstream adoption by enabling stablecoin-denominated wages, blockchain-based lending, micro payments, cross-chain settlements, and a host of other applications. Stablecoins are cryptocurrencies whose value is pegged to the value of a different asset (mostly USD, but other fiat-pegged stablecoins are also in existence with more in the pipeline). Stablecoin development activity  is witnessing sharp growth outside the US, especially in Asia, with a few projects ready to be launched soon around SGD, AUD, JPY and KRW. Besides the arbitrage use case, stablecoins could potentially pave the way for mainstream adoption by enabling stablecoin-denominated wages, blockchain-based lending, and a host of other applications. We expect the stablecoin ecosystem to become richer and more vibrant as more and more fiat-pegged stablecoins of various currencies come in to being, in addition to of course, CBDCs, or Government- backed stablecoins.
Price arbitrage between stablecoins is expected to attract trading activity on exchanges. In addition, having a robust and liquid market for trading between stablecoins of various currencies has the potential to disrupt the costly, opaque legacy infrastructure for remittances. We therefore decided to leverage the 0x protocol to launch a relayer that predominantly focuses on stablecoin-to-stablecoin trading, in order to build out the next generation of crypto-powered FX markets.    
Why build a relayer?
We spoke about this at length yesterday. Centralized exchanges have for long been the achilles heel of the crypto ecosystem and are on the wrong side of the industry evolution curve. Besides offering almost zero privacy through mandatory KYC/AML imposition and the onerous onboarding procedures, centralized exchanges are also the most vulnerable to many attack vectors, including exchange hacks, DDoS attacks, etc. On the other hand, 0x-based relayers enable p2p trustless trading where the relayer does not take ownership of users’ funds at any point during the trade and also offer full privacy. Users can simply plug-in their wallets to, for instance, the ForDex relayer and trade tokens directly in and out of their wallets effortlessly for any ERC20 token. ForDex maintains an off-chain order-book that matches orders and sends the orders to the Ethereum blockchain for execution.
A DEX also offers another critical design advantage. It can focus on improving the overall user experience for what is essentially a dynamic bulletin board displaying the order books for various currency pairs, and leave the KYC/AML requirements that many use cases might need to partners who provide that service. This will gradually enable on-boarding of other tokens, as well as of course the fiat on-ramp, which we are launching with Wyre.
When is the launch? What features will be available?
We launched our ‘alpha’ version of ForDex today. During our alpha stage, we intend to provide the following features on our relayer:
  1. Stablecoin-to-Stablecoin trading for the USDC/DAI, PAX/USDC, DAI/KRWb, PAX/KRWb, USDC/KRWb
  2. First-ever fiat onramp for a relayer, with assistance from Wyre
  3. First-ever exchange to facilitate fast and transparent conversion of USD to KRW through stablecoins (DAI/KRWb, USDC/KRWb and PAX/KRWb)
Why focus on stablecoins?
Focusing on stablecoins helps us closely focus on the problems of the emerging stablecoin ecosystem - the stablecoin issuers, the market makers that support them, and the traders that trade them face. There are over 60 stablecoin projects around the globe, and the number is growing. Additionally, there are huge opportunities in inter-country and intra-country remittances that stablecoins can potentially address. As mentioned above, we might also add the ability to trade security tokens. Over the next few weeks, we plan to gather feedback, iterate and execute on our product roadmap
Interested in partnering?
We would love to talk to you, irrespective of whether you are a user, a stablecoin issuer, a market maker, an investor or from the media, or just an old friend. You can reach out to us at for collaborative opportunities and discussions. Do not forget to follow us on Reddit, Twitter, Medium and Telegram.  
Meanwhile in Crypto Wonderland....
“Genesis Lending Over $1.1 Billion”
Institutional crypto loans firm Genesis Global Capital says it processed more than $1.1 billion in lending and borrowing in 2018. The firm, affiliated to Genesis Global Trading, published its latest “Digital Asset Lending Snapshot”, announcing that it had more than doubled its loan originations in the last three months of 2018, compared to the previous six months. The company processed $500 million in loans between March and October 2018, and again between October and the end of December.
“Iran Negotiating Crypto Transactions With 8 Sovereigns”
Iran is reportedly negotiating with eight countries to carry out financial transactions in cryptocurrency, according to Tehran Times. As per the article, Iran has already entered negotiations with Switzerland, South Africa, France, UK and others, with representatives visiting Iran. It was not immediately clear whether the news concerns the national cryptocurrency that Iran is allegedly set to launch vin the near future. However, the article notes that the talks on crypto transactions were held order to circumvent the ongoing United States sanctions against the country, which matches with the main stated goal of Iranian coin.
“World Gold Council Slams Crypto as Safe Haven”
The World Gold Council has released a report in which it makes the case that Bitcoin and other crypto do not act well as a safe haven like gold does and instead act as a high risk investment. The report, titled “Investment Update: Cryptocurrencies are not a safe-haven,” asserts that “In Q4 2018, as global stock markets experienced their worst quarter since 2009, cryptocurrencies had a prime opportunity to demonstrate qualities associated with safe havens like gold. However, cryptocurrencies, such as bitcoin, behaved like risky assets and fell while gold rallied“.
“Crypto Gender Diversity (or Lack of it)”
79 percent of attendees at crypto events are male, according to a report by events-oriented software firm Bizzabo. After analyzing the registration information of 100 different cryptocurrency-related events in 15 countries. 57 percent of attendees were employed in the financial sector, while other registrants at crypto events worked in such fields as IT (14 percent), computer software (13 percent) and banking (10 percent), among others. Alon Alroy, Co-founder of Bizzabo, said “Like the tech industry, at large, there is a lack of gender diversity in the overall virtual currencies space”.
Crypto Twitter Pick
Arianna Simpson
Amazing how people outside the space seem to think crypto is dead. Dev activity is booming. It is 100% a full time job just trying to keep up with everything! Need more hours in the day...
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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Brought to you by Satoshi&Co
Brought to you by Satoshi&Co
This newsletter does not constitute an offering of securities in any jurisdiction. The contents of this note should not be construed as investment advice or as a recommendation to purchase securities. This note is intended for the consumption of the recipient alone and not for public distribution. Please consult a certified financial advisor or other appropriate practitioner as may be appropriate as per your jurisdiction.
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