IDEX is betting that three chains are better than one. The custody free cryptocurrency exchange, whose operations run on the Ethereum blockchain, announced Tuesday that it plans to expand its business to the Binance Smart Chain and Polkadot networks. Hence, anyone who owns an Ethereum IDEX token will receive an equivalent number of IDEX tokens for each of the new chains.
IDEX plants its flag for a multichain future and creates its space on Binance Chain and Polkadot
"If you look at all this from a business perspective, we thought, where can we offer clients new trading networks?" IDEX CEO Alex Wearn said in an interview.
While it remains to be seen whether the volume on new smart contract chains will ever compete with that on Ethereum, IDEX is taking these steps "so that we can put a stake in the ground and plant our flag early," Wearn said.
The new tokens will be distributed on December 7 and IDEX holders will need to request them promptly or they will return to a community fund whose use will be determined later. Wearn said he expects IDEX trading to become active on the new chains in early 2021, and perform optimally as early as the first quarter.
IDEX aims to be a custody free exchange that can compete with fully centralized ones. To this end, the exchange has adopted a hybrid approach in which it centralizes trade executions and decentralizes settlement and storage.
Wearn said its design reflects a commitment to keeping user assets out of IDEX's control. The design is also intended to offer many of the features that centralized exchanges have while decentralized (DEX) exchanges so far largely cannot, such as high-speed order matching.
IDEX tokens are used for the staking from the nodes that validate the transactions on the off-chain register of the exchange; validators are paid for their work in additional tokens and can lose their stake if they behave incorrectly.
Ready to go
The company intends to expand to other chains as it makes sense to do so, and is starting with Polkadot and Binance Smart Chain because both are fully compatible with the Ethereum Virtual Machine (EVM). Further details remain to be defined for Polkadot while for Binance Smart Chain the situation seems clear enough.
Regarding the latter, in fact, IDEX based in Panama is practically ready to go, with some details on the application side still to be processed. It should be noted that the choice of IDEX does not mark the beginning of uninterrupted exchanges across different chains.
A user who wants to trade, say, ether (ETH, the native Ethereum token there quotation is rising rapidly) for a token that is only available on the Binance chain should first move the ETH across a "bridge" on Binance. “Pure cross-chain trading is still many, many years away,” Wearn said.
