High-Frequency Market Maker for Cryptoassets Compares Binance and Coinbase Business Models

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High-Frequency Market Maker For Crypto Assets Compares Binance And Coinbase Business Models

Ricky Li, the Co-Founder at Altonomy, a digital asset trading, advisory, and management firm, recently shared his views and insights regarding the business operations of the leading cryptocurrency exchanges.

Ricky, who earned his Ph.D. in computer graphics and data compression from Rensselaer Polytechnic Institute, has extensive experience in both the nascent crypto assets market and the traditional financial securities industry. He has also developed a unique understanding of institutional investors’ barriers to entry into the emerging digital asset class.

Having worked previously as Manager of Research and Product at the CME Group and as Senior Manager at “Big Four” professional services firm PwC, Li has been able to leverage his vast experience to help institutional clients better understand how to sensibly invest in crypto assets.

Coinbase Vs. Binance

BitcoinExchangeGuide: Could you compare and contrast the different business strategies used by Coinbase and Binance? As two of the leading crypto platforms, what do you think are the main services they can offer to cryptocurrency traders in the coming years?

Ricky Li:

As we discussed, in a few areas their approach differs drastically:

· Custody: Binance aims to solve the issue of asset custody by giving the right back to its user through the blockchain. Binance’s decentralized exchange running on the Binance Chain, for example, is experimenting with no central custody of funds as a potential solution to asset safety.

Coinbase, on the other hand, leans towards more traditional methods of custody, investing heavily to improve cybersecurity measures, cold storage procedures, and multi-signature mechanisms to ensure asset safety.

While Binance seems to provide the better solution superficially because the exchange will never hold assets on investors’ behalf. This, as its DEX implementation, is not necessarily…

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