AirSwap is launching some pro tools to attract institutional investors towards decentralized exchange (DEX) for token ethereum.
Revealed exclusively to CoinDesk, the company is launching this week an interface for the so-called "over the counter" trading of blocks (OTC). So far, users of AirSwap have reported the intention to buy or sell a certain amount of tokens at a certain price on a take-it-or-leave-it basis, the new front end includes a chat feature so that operators can negotiate terms privately. Large and sophisticated investors often prefer to trade in this way rather than broadcast a large order that could move the market.
The new interface also includes an identity verification system, with ID checks performed externally by Wyre, a regulated monetary services company (MSB)). This helps institutional players such as brokers adhere to the regulations that require them to know with whom they are trading.
By putting them together, these features should address the concerns that kept the curious institutional investors of DEX at bay, bringing a large amount of capital into this market, AirSwap said.
"Basically, it allows greater flexibility on price and the possibility of getting to know your counterpart, evaluating with whom you would do business more directly", said co-founder Don Mosites to CoinDesk of the new service, adding:  "With OTC tools, this unlocks a whole new world of liquidity, which will allow businesses of any size to happen with the AirSwap network."
While the institutions have plunged their toes into crypto markets for some time It may seem strange that these highly regulated entities are interested in decentralized exchanges, since such platforms are born of anti-establishment and encrypted ideals.
But according to AirSwap, and some of the broker-dealers and hedges fund representatives who attended a demonstration day at the Brooklyn, NY office, last week, DEX appeals to these players for a reason practice.
Unlike centralized exchanges where cryptocurrency transactions occur, a DEX, by definition, allows investors to control the custody of their private keys.
This does not mean that all institutions want to handle custody on their own, as do users of crypto hardcore. But some would prefer to choose the third-party custodian rather than entrust that role to the cryptocurrency exchanges, which are notoriously bad in protecting users' funds.
In this way, he is saying that BitGo, the multi-signature portfolio provider, has recently added support for AirSwap's AST tokens (which traders must bet on to publicize their intention to trade on the DEX bulletin board). BitGo recently commissioned high-end custody clients and said that AST's support was also a response to the demand for hedge funds and other institutional investors.
Institutional and retail
AirSwap claims its DEX, which fills orders via smart contracts on ethereum, offers a more efficient way to conduct OTC negotiations, which are often traded on Skype today and can take days to settle. But the blocks for the institutional use of DEX are significant.
A lack of accountability is one of the big capital investors' puzzles, according to Preston Byrne, an independent blockchain consultant. Most DEXs offer poor options for negotiating or resorting to bad actors.
"This is one of the reasons you have big counterparts in transactions – it's an insurance policy," Byrne said.
In addition, decentralized systems are often less efficient than centralized platforms, which Byrne said makes investors reflect:
"Because we are paying the penalty for decentralization if we do not receive all the features of an OTC trade, that is individually negotiated and varies in some way from the current market price? "
The new features that AirSwap is adding are designed to address these concerns for institutional investors, which the company has courted since its foundation last year. But it could also be useful for projects that try to get their tokens into the hands of everyday consumers.
For example, when the Civil journalism startup launches in October, it plans to integrate the AirSwap widget, which facilitates the purchase of tokens from a third-party platform. (More than 16 blockchain projects using the standard ERP-20 ethereum tokens, from the SpankChain adult entertainment platform to the Augur prediction market, integrate the AirSwap widgets directly into their platforms for this purpose.)
The first year, the only way to buy civil tokens will be through a know-your-customer (KYC) process for consumers that shows that the buyer is a participant reader or journalist who knows how archive and use the cryptocurrency.
Matt Iles, civil CEO Matt told CoinDesk AirSwap & # 39; s KYC capabilities, together with its atomic exchanges and price discovery mechanisms, adapted to the efforts of its project to grow a closed ecosystem without to sacrifice liquidity.
Looking to the future, there will be ways for Civil readers to earn tokens to support an editorial staff, share content or help direct new members to a newsroom. Therefore, OTC block trading functions may apply to professionals seeking to convert such premiums into a more diversified portfolio.
"We are both trying to anticipate the appearance of this token consumer world," said Iles. "AirSwap is interested in exploring this consumer space with us as something that is about to grow and become a larger part of their offering."
Image of AirSwap co-founder Michael Oved (L), who trades with the investor Michael Novogratz (R), as an analyst with AirSwap Maxime Bucaille (standing), looks through Lucas Hoeffel