Arwen Enables Self-Custody for Traders of Centralized Crypto Exchanges
Centralized exchanges are a common security concern in the cryptocurrency ecosystem. As a single point of failure they can be strong-armed by governments, routinely targeted by hackers, or operators could pull an exit scam and elope with client funds. Despite these risks, they dominate cryptocurrency trading volumes. A new solution promises to enable trade to use centralized exchanges but without handing over control of coins to them.
Also Read: Belarus’ Largest Bank May Establish a Cryptocurrency Exchange
Not Your Keys, Not Your Coins
Boston-based startup Arwen (formerly Commonwealth Crypto) announced on Jan. 28 the release of its testnet trading application. The company aims to bring atomic swaps to mainstream cryptocurrency trading with its technology. Using the service, traders can deposit their coins in an onchain escrow, rather than with an exchange, removing the need to trust the centralized venue to handle the money. This allows them to maintain custody of their coins while trading on a centralized exchange without having to transfer coins to the exchange’s omnibus wallet or their keys to a third-party web server.
“If you do not hold the keys, you do not own your coins,” Arwen’s CEO Sharon Goldberg stated. “The ethos behind cryptocurrency is built upon a trustless, non-custodial technology. Centralized exchanges are needed for liquidity; however, the exchange of customer coins should be executed in a trustless way. We have solved … that problem.”
Kucoin Is Already on Board
Arwen also announced it is teaming up with the popular Singapore-based global cryptocurrency exchange Kucoin to offer its customers the possibility of using the new service. In addition to Kucoin, the startup reports being in talks with other exchanges about integrating the protocol. It currently supports trading on BTC, LTC, BCH, ZEC and ETH as well as ERC20 tokens.
Kucoin President Eric Don commented: “KuCoin has been working hard to ensure the security of the exchange itself, and we are one of the few exchanges that are rated A in terms of security by ICOrating, but we are also exploring other ways to satisfy users who have extreme security requirements and do not trust any third party. [Arwen’s] escrow mechanism enables users who have extreme security requirements to have a higher sense of security in transactions.”
What do you think about using a protocol such as Arwen’s for trading? Share your thoughts in the comments section below.
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by Avi Mizrahi via Bitcoin News