- Cryptocurrency exchange Beaxy has partnered with Dragonchain to bring provably fair transactions to the exchange
- Beaxy users will now be able to see non-executed as well as executed trades
- The implementation means that users can clearly see if any malpractice is going on, such as wash trading or spoofing
Cryptocurrency exchange Beaxy has teamed up with Dragonchain to provide a cryptocurrency first – provably fair orderbooks. The concept of provably fair transactions has been used with cryptocurrency casinos for some time, but this is the first time the system has been used on an exchange. In a press release announcing the move, Beaxy said that the new system, which was alluded to last year when Co-President Bay Abbot and Head of Operations Naeem Master spoke to FullyCrypto, would ensure transparency of orders conducted on the exchange. This practice, if applied wholesale across the space, would help identify the malpractice by exchanges that has plagued the space since its inception.
No Hiding Place For Beaxy Transactions
Beaxy announced the move earlier this week, calling the implementation of provably fair orderbooks “the future of legitimate finance” and stating that many cryptocurrency exchanges “are operating behind a curtain concealing how orders are placed on their platforms”. History has shown that many of these exchanges have used this cloak of concealment to try to hide malpractices such as front-running, wash trading, spoofing, and churning, all of which are now impossible on Beaxy.
By implementing Dragonchain’s methodology, Beaxy orderbooks will have two layers of transparency, with executed as well as non-executed orders shown and independently verifiable on the Dragonchain blockchain. This is particularly important when it comes to market spoofing, which is where exchanges themselves continually place non-executing buy and sell orders, information that will now be immediately available to Beaxy traders, allowing them to make more informed decisions about their trading options.
Others to Follow Suit?
Beaxy is the first exchange to implement such a system, but it is something that would certainly benefit the space if it were rolled out on a large scale, as Abbott told FullyCrypto by email:
If you run the clocks out a year from now, proof systems will become standard on every exchange. The reason for that is the issue we are seeing with front-running in DeFi currently. Who wants to trade on an exchange, centralized or decentralized, if they are getting line jumped by someone every time they make a trade? Not knowing who is betting against you on the order book and how they are betting is a serious disadvantage in this game and because of that, I am confident proof systems like the one we built with Dragonchain will proliferate.
Indeed, with systems like Dragonchain’s clearly ready for implementation, cryptocurrency exchanges now have no excuse to do what Beaxy has done and prove how honest and fair their orderbooks really are.