On October 4th, Business Korea reported that Bithumb, the world’s sixth-largest cryptocurrency exchange by daily trading volume, is set to introduce a global decentralized exchange (DEX).
Bithumb announced that it will launch "Bithumb DEX" by the end of this month through its overseas subsidiary. To support this initiative, Bithumb is collaborating with blockchain technology firm One Root Network (RNT), which has developed an Ethereum-based decentralized token trading protocol named "R1." This protocol is already operational and supports decentralized trading.
The R1 protocol separates the order matching process from order execution. RNT claims that this approach enhances both security and matching efficiency.
Decentralized platforms enable users to engage in peer-to-peer transactions through automated systems. Since Bithumb DEX will not hold users' cryptocurrencies directly, it is less vulnerable to hacking attempts. However, as noted by Business Korea, DEX platforms often suffer from slower transaction speeds compared to centralized exchanges.
The report cites Bithumb officials, who clarified that the partnership with RNT is focused on "technical support." The company emphasized that "Bithumb DEX will be operated by its overseas subsidiary, and the cooperation with RNT is limited to the decentralized trading component."
As outlined by RNT, the project aims to assist high-traffic platforms like Bithumb in building their own decentralized exchanges. Participants using the R1 protocol can share trading data and liquidity as part of a broader ecosystem.
Business Korea also spoke with an anonymous industry insider, who suggested that this move signals Bithumb’s strategy to expand its global presence:
While Bithumb is one of the leading global exchanges in terms of trading volume, the majority of its users are based in Korea. The launch of a highly anticipated decentralized exchange appears to be part of the company’s strategy to compete in the global market.
The report also highlighted that Upbit, a local competitor of Bithumb, recently invested in Allbit, signaling its own plans to enter the decentralized trading arena.
In August, Blockcast reported that Binance, the world’s largest cryptocurrency exchange, released a demo version of its decentralized exchange and public blockchain, Binance Chain. The official launch is expected around late this year or early next.
According to data from CoinMarketCap, Bithumb’s daily trading volume stood at $332,463,402 at the time of writing.
Frequently Asked Questions
What is a decentralized exchange (DEX)?
A decentralized exchange allows users to trade cryptocurrencies directly with one another without relying on a central authority. Transactions occur peer-to-peer using automated smart contracts, which can enhance security and user control over assets.
How does Bithumb DEX improve security?
Since Bithumb DEX does not custody user funds, it reduces the risk of large-scale hacking incidents. The integration of RNT’s R1 protocol, which separates order matching from execution, adds an additional layer of security and operational efficiency.
Will Bithumb DEX be available globally?
Yes, the platform will be launched and operated through Bithumb’s overseas subsidiary, making it accessible to international users. This forms part of Bithumb’s broader strategy to compete in global markets.
How does RNT’s R1 protocol work?
The R1 protocol is built on Ethereum and facilitates decentralized token trading. It separates the order matching and order execution processes, which helps improve transaction speed and security. The system also allows different platforms to share liquidity and data.
What are the disadvantages of using a DEX?
The most common drawback is slower transaction speed compared to centralized exchanges. Additionally, user experience can sometimes be less intuitive due to the technical nature of peer-to-peer trading systems.
Are other major exchanges developing DEX platforms?
Yes, other industry leaders like Binance are also advancing their decentralized trading offerings. This reflects a growing trend toward more secure and user-controlled trading environments in the cryptocurrency space. 👉 Explore more strategies for decentralized trading
Disclaimer: This article is for informational purposes only. It is not intended to serve as investment advice. Readers should conduct their own research and make independent financial decisions.