New cryptocurrency exchanges are coming and what’s more they’re coming in their droves. Like a zombie infestation, they’re descending in waves, simultaneously swamping and swarming the current landscape that’s dominated by a handful of major players. DEXes; security platforms; hybrid exchanges; AI-powered trading engines: all incoming, and incoming fast.
These shiny, high-tech and (usually) tokenized exchanges promise to be all the things the current crop are not. Gone are the days when listing half a dozen solid altcoins was enough to launch an exchange. The era defined by Mt Gox and Btc-e, powered by a simple trading engine and a trollbox, are long gone (and for good reason). The multi-dimensional next generation exchanges that have supplanted them aren’t content to be good at one thing — they want to be good at all the things: liquidity, coin selection, ICO launching, community incentivization, rewards mechanisms, supplying strategies, implementing copycat trading and, oh, don’t forget the AI. Because 2018.
New competition, new technology and new options are to be welcomed. After all, the landscape, when it comes to cryptocurrency exchanges, has scarcely changed in five years. With the exception of Binance, the market is still dominated by the same handful of giants — Coinbase, Bitfinex, Bitstamp — who control the bulk of the trading volume, excluding the localized Asian platforms such as Bithumb.
Step outside of the top 10 exchanges and the user experience can best be described as challenging and less charitably as dogshit, as anyone who’s used the hundreds of smaller exchanges will attest. When it comes to decentralized exchanges, options, similarly, have traditionally been less than overwhelming. For years, EtherDelta was all there was, an ERC20 trading platform whose abominable interface and propensity to REK traders who missed a zero when placing an order is legendary. Alternatives have mercifully since emerged, of which IDEX is the strongest contender. Its usable interface and intuitive and functional trading engine have played a large part in helping it overtake EtherDelta to become the leading Ethereum DEX.
Even so, platforms such as IDEX and WandX are limited by their inability to offer anything other than ERC20 tokens. Once again though, change is coming, with Wanchain at the forefront once it becomes fully operational.
It’s both fascinating and exciting to watch the proliferation and diversification of new exchanges, each gunning to outmuscle the competition, and — in a dream world — to pull a Binance and go from zero to bona fide unicorn in under a year. Even if these arrivistes can merely carve out a respectable user base, and retain sufficient liquidity, however, they can consider their mission a success. After all, there’s more than enough pie for everyone, with new traders still entering the crypto markets, whose growth is still only just getting started.
But amidst all the exuberance about advanced AI and hybrid functionality and multi-asset atomically swapped collateralized trading and all the rest, there’s a danger that these new exchanges are in danger of getting distracted.
Because the killer feature of the new platforms that prosper won’t be futuristic, cutting-edge or front-loaded with buzzwords. In fact it won’t be tech-related at all. The feature to define the best performing exchanges to emerge in the next 12 months will in fact be people.
And not trading ninjas, crypto celebs, or superstar influencers. Just ordinary people capable of picking up the phone or responding to a support ticket in a timely and courteous manner. If you need convincing, go visit the social channels — the Reddits and Twitters — of the leading exchanges and see what their users are complaining about most. It’s not the lack of umpteen trading pairs or the inability to implement bot-based trading strategies — it’s crappy customer service. Fix that and you’ll fix the most pressing problem afflicting cryptocurrency exchanges throughout the space.
Some get it. Belatedly, but they get it. Bitstamp has hired a bunch of new customer support representatives, Kraken has upped its game, and at Poloniex, Circle has been working its way through the volume of support tickets. Some new entrants, such as Ezexchange, seem to have also gotten the message, pursuing a model that’s built around good old-fashioned customer service rather than bells, whistles and gratuitous use of the phrase “machine learning”.
But the majority of the new entrants either don’t seem to know or don’t seem to care that what the people really want is more people. Because nothing can turn a favorite exchange into a hated exchange quicker than an unanswered support ticket. You get locked out or a deposit fails to show up and then…and then nothing. Weeks turn into months, and your polite entreaties for assistance turn into increasingly shrill ones for help, without attaining a satisfactory response.
In fairness to the extant crypto exchanges, they’re not deliberately being dicks. The crypto mania of 2017 took everyone by surprise, leaving exchanges overwhelmed and groaning under the weigh. They’ve been playing catch up ever since. That being said, it’s not as if customer support was particularly hot pre-2017. Even before they were deluged by requests, most exchanges still managed to dispense crappy customer service. High demand, therefore, can only atone for so much.
Internet companies in general aren’t fond of handing out their phone number, because running a call center costs rent and wages and all kinds of overheads. Far easier to rely on an impersonal contact submission form and an inbox that can be attended to in due course, when staff finally get round to it — if they ever get round to it. The trouble is, crypto’s different from other online businesses. Crypto never sleeps, because the markets never close, and due to the significant amount of capital traders have locked up in these platforms, they worry when things go wrong.
When you’re running an exchange that’s pulling in tens or even hundreds of millions of dollars a year, there’s no excuse for delivering poor customer service. It doesn’t do the platform’s reputation any favors, which in turn isn’t good for business. Thus, if only for selfish reasons, it makes a lot of sense for exchanges to remedy this. It might not be sexy or seminal, but make no mistake, the killer feature for new crypto exchanges is people.
Create a usable platform with capable customer support and there’s a good chance you won’t just survive — you’ll prosper.