Coinbase Acquires Crypto Trading Platform Paradex to Add ERC-20 Tokens
Coinbase has announced the acquisition of Paradex, a crypto trading platform that leverages ERC-20 relay tokens to enable more expansive trading options in a decentralized fashion. Paradex’s platform will be integrated into the company’s new professional trading product, Coinbase Pro, which was unveiled today as a re-branded GDAX.
In the announcement, Coinbase CEO Brian Armstrong gives a brief statement regarding the fundamental drivers behind the acquisition of an undisclosed amount.
“We’re thrilled to announce the acquisition of Paradex, a relay platform that will allow our customers to trade hundreds of tokens directly from their wallets. The move not only reinforces Coinbase’s commitment to investing in decentralized infrastructure and participating in the nascent world of wallet-to-wallet trading, but also our focus on the international crypto trader. After making some product enhancements, we’ll initially offer this experience to customers outside the U.S., and eventually to U.S.-customers.”
Traditionally, ERC-20 relay tokens allow users to convert between Etherum and the token of interest through an instant two-step process of first converting the Ethereum to the relay token, commonly referred to as ‘wrapped ether’, then immediately selling it for the desired token. This token exchange is conducted all from the security of the users’ own wallet, removing the need for a centralized exchange.
Relay tokens, which were made popular by the project Bancor (BNT), commonly hold a 50/50 supply ratio of the tokens it is connecting, and could potentially allow Coinbase customers to invest in projects like Augur (REP), OmiseGO (OMG), and Basic Attention Token (BAT).
Coinbase plans to integrate the product onto its platform after making enhancements and adjustments, and the new broader portfolio offerings will be available first to customers outside of the United States. This acquisition comes just two months after the company announced that it would be adding support for the ERC-20 technical standard.
In its announcement, Paradex shared in the excitement and assured its current users that it will continue to build out its existing roadmap, while also exploring new opportunities as a Coinbase subsidiary.
“One year ago this month, we set out to build the best decentralized relayer that empowers users with self-custodianship. A year later, we’re not only extremely proud of what we’ve achieved, but intensely optimistic about where our space is headed and the explosion of opportunity growing each and every day.”
“It was clear from our first conversations with Coinbase that the excitement and optimism was mutual. Like Coinbase, we believe wholeheartedly in the power of an open financial system; it’s paramount to what we’re working towards at Paradex. In our next steps together, we’ll continue to build out the existing Paradex roadmap and continue to explore the world of decentralization and the amazing opportunities at hand.”
This news drops in the same week that other retail crypto investment platforms, Abra and Circle, announced their own major feature developments. On Monday, Abra announced that it now supports direct deposit and withdrawals of Litecoin, while on Tuesday, Circle unveiled its new ‘Buy the Market’ feature that enables investors to automatically diversify their holdings across multiple digital currencies with a single click of a button.
It is not clear when the new Coinbase relay token functionality will be rolled out, and the company has given no indication to which ERC-20 tokens will first be available for trading.