Asian Firms Feature in Ledger’s Institutional Trading Offering

WOO X, a Taipei-based cryptocurrency exchange, has successfully raised $9 million in its latest funding round, with notable investors including crypto market maker Wintermute. Jack Tan, co-founder of WOO, emphasized the significance of this funding in aligning the interests of liquidity providers rather than as a capital-raising exercise. On social media the company wrote that it “welcomes an elite group of liquidity providers to our ecosystem - as our commitment to building the best environment for traders remains steadfast.”Photo by micheile henderson on UnsplashDesignated market makersThe funding comes from designated market makers (DMMs), featuring participants like Selini Capital, Time Research, Pulsar, Efficient Frontier, Singapore’s Amber Group, AlphaLab Capital, Presto Labs and Riverside Hedge. This infusion of capital is expected to enhance liquidity on WOO X, starting with the BTC and ETH perpetual futures markets and later expanding into altcoin perpetual futures and all spot markets. WOO X plans to roll out a designated market maker (DMM) program for its spot markets in the first quarter of the current year. These strategic moves are expected to contribute to achieving a 100% custody ratio by the second quarter of 2024. Business model pivotWOO X underwent a strategic shift in its business model during the third quarter of the previous year. It transitioned to partner with multiple liquidity providers for both spot and perpetual futures markets, moving away from reliance on a single provider, Kronos Research. The decision to diversify followed a security incident in November 2023, where Kronos suffered a hack leading to an estimated loss of $25 million. As a response, WOO X took proactive measures to restructure its operations. As part of that plan to address liquidity, last month WOO X established a significant partnership with Wintermute, the leading algorithmic trading company and liquidity provider with a trading volume of approximately $3.6 trillion. This partnership positions Wintermute as the primary liquidity provider for WOO X, further strengthening the exchange's market presence. News of this development in December led to a marked increase in the unit price of the platform’s WOO token. Over the course of the last two weeks of December, the WOO token price increased from $0.2385 to $0.4718, representing a 98% increase. Contributing to its recent surge is the partnership announcement with Arbitrum by WooFi exchange, a development that attracted attention from potential investors. The exchange implemented various initiatives to fortify its position, including updates to its fee structure, technology infrastructure enhancements to accommodate multiple designated market makers simultaneously, the introduction of a maker rebate in USDT and the launch of the DMM rewards pool to further incentivize liquidity provision on WOO X. Global expansionThe newly secured funds are earmarked for global market expansion and obtaining regulatory licenses, aligning with WOO's vision for sustainable growth. In 2021, Woo Network successfully closed a $30 million Series A funding round. Subsequently, in October of the previous year, the company repurchased its shares and tokens from the bankruptcy estate of Three Arrows Capital, a participant in the Series A round.  

Bithumb and Korbit Struggle to Gain Traction Despite Zero Trading FeesSouth Korean cryptocurrency exchanges Bithumb and Korbit have recently eliminated trading fees, but their bold decision hasn’t yielded much results. Bithumb was the first to implement this change and attracted users for about a week, but it is now seeing a loss in market share. Korbit, following Bithumb’s example, is also struggling to achieve meaningful outcomes.Photo by Alexander Grey on UnsplashLimited impactLocal media outlet Chosun Biz used data from crypto data platform CoinGecko to draw this conclusion. On October 26, Korbit’s daily trading volume represented 0.19% of the total trading volume among South Korea’s top five crypto exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax). This figure marked a 0.14 percentage point increase compared to the 0.05% recorded on October 19. Korbit had implemented a zero trading fee policy at 9 a.m. (KST) on October 20. Additionally, they launched a promotion offering KRW 5,000 ($3.69) worth of bitcoin to users who transferred virtual assets totaling KRW 1 million or more from Travel Rule-compliant exchanges to Korbit. While the promotion did contribute to Korbit’s market share, it still remains below 1%.Bithumb’s performance showed some improvement, albeit briefly. As of October 26, Bithumb’s market share stood at 18%, marking a 4.7 percentage point increase from its 13.3% share on October 3, the day before it eliminated trading fees. However, it’s worth noting that its market share had reached almost 30% shortly after the promotion’s launch. This indicates that its strategy is losing efficacy over time.The less-than-enthusiastic results from their daring marketing endeavors can be attributed to their inability to draw in retail investors. To begin with, Upbit, the leading player in the market, had already been providing a relatively low fee of 0.05%. Furthermore, adapting to new user interfaces on these exchanges posed a challenge. Zero trading fees weren’t attractive enough for crypto investors to leave their current platforms.Trading volume mattersIn the case of Korbit, its lower trading volume was a disadvantage when it came to attracting users. On crypto exchanges, a higher trading volume typically translates to faster trade executions. As a result, users of Korbit might experience delays in executing trades at their preferred price.Jeong Hye-won, a research associate at crypto data analytics platform Xangle, told Chosun Biz that users on exchanges with lower trading volumes tend to experience slippages due to slower transaction speeds and sparsely populated order books. A slippage means the difference between the initially placed order price and the executed order price. Jeong further explained that Korbit’s zero trading fee policy didn’t have a significant impact because it offers fewer listed tokens compared to Upbit and Bithumb.There is speculation that the free-trading fee promotions introduced by Bithumb and Korbit, despite their revenue sacrifices, might conclude sooner than initially anticipated due to their perceived ineffectiveness. Bithumb derives 99.95% of its revenue from trading fees, while Korbit relies on trading fees for 99.79% of its income. An industry insider has commented that trading fees play a vital role in an exchange’s revenue, and given Bithumb’s reported loss in earnings during the second quarter, there are concerns about their capacity to sustain this strategy.

Welcome Savings Bank Implements Blockchain-based Bank ID for Enhanced Customer ConvenienceWelcome Savings Bank, one of the mutual savings banks in South Korea, has announced a significant step towards enhancing identity security and customer convenience with the incorporation of Bank ID, a blockchain-based decentralized identity (DID) solution operated by the Korea Financial Telecommunications and Clearings Institute (KFTC), a payment services institution.Photo by Jonathan Cooper on UnsplashDID technology to prevent identity fraudThe utilization of DID technology marks a notable stride in preventing identity fraud. By storing user data on a secure distributed ledger, the system becomes highly resilient to counterfeiting or forgery attempts, ensuring a safer environment for customers’ personal information.Single sign-on functionalityWith this initiative, Welcome Savings Bank has become the first savings bank in the country to implement Bank ID, a solution predominantly adopted by prime commercial banks. This strategic move bolsters the bank’s digital competitiveness and improves customer convenience. With Bank ID, users can enjoy seamless access to their accounts across 18 Korean financial institutions without the hassle of logging in separately for each one, streamlining their banking experience.Customers of Welcome Savings Bank can utilize the bank’s mobile app to acquire a Bank ID by undergoing a verification process through a one-time password or security card. For existing Bank ID holders, adding Welcome Savings Bank to their list of banks is a straightforward procedure.The decision to embrace this innovative technology highlights the bank’s commitment to meeting the high standards set by prime commercial banks. By aligning with industry trends and bolstering their digital capabilities, savings banks like Welcome and other subprime banks can deliver improved convenience and a seamless banking journey to their valued customers.