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Coinbase acquires decentralized cryptocurrency trading platform Paradex

reuters.com

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Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#21

Post by darawk »

jgh wrote: post #8
snissn wrote: post #7

Earlier quoted context omitted.

> Which begs the question - what tokens are actually worth trading in the first place? I think we're getting closer to tokenizing actual securities. Similar to how TrueUSD is tokenizing U.S. Dollars, I think we're fairly close ( 5 years out) from NASDAQ officially tokenizing their stocks ( as an erc20 on the ethereum blockchain)

why would they do that?

To eliminate single points of failure, siloing and centralized control. Right now a small group of massive incumbent institutions collect quite significant rents in exchange for providing market access and maintaining custody of funds. This involves tons of transaction costs, slowness, brittleness, mistakes, and of course, severely restricts who by and how these markets can be accessed.

Tokenizing securities can open that up, make it more transparent, safer, and less friendly to incumbent interests.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#22

Post by tomjakubowski »

shanev wrote: post #19
koolba wrote: post #15

Earlier quoted context omitted.

To finally put an end to flash trading by limiting the total transaction throughput to one trade every ten minutes.

In 5 years both sharding and Plasma would be implemented on Ethereum. NASDAQ would probably run its own Plasma chain or sidechain and wouldn’t be beholden to the main chain’s throughput.

> NASDAQ would probably run its own Plasma chain

If they're running a blockchain on their own, doesn't that defeat the point?

> To eliminate _single points of failure, siloing and centralized control_.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#23

Post by hendzen »

darawk wrote: post #21
jgh wrote: post #8

Earlier quoted context omitted.

why would they do that?

To eliminate single points of failure, siloing and centralized control. Right now a small group of massive incumbent institutions collect quite significant rents in exchange for providing market access and maintaining custody of funds. This involves tons of transaction costs, slowness, brittleness, mistakes, and of course, severely restricts who by and how these markets can be accessed. Tokenizing securities can open…

What specific transaction costs/rent collecting are you referring to? As a retail investor I can trade stocks for free on Robinhood. My orders get filled instantaneously at the current market price. On other platforms the per-trade fee is a couple bucks, regardless of transaction size.

With Coinbase I pay a MUCH larger fee, that is a percentage of the transaction size rather than zero (with Robinhood) or a low fixed cost. With Coinbase I would pay a ~15 dollar fee to buy or sell $1000 dollars of BTC or ETH.

As far as moving money in/out of Fiat, Robinhood/Etrade/etc also win with near instant transfers if your account is already funded. Coinbase buys and sells take days to clear.

Can you provide specific real-world examples of how tokenized securities can help with "transaction costs, slowness, brittleness, mistakes" ?

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#24

Post by __blockcipher__ »

hendzen wrote: post #23
darawk wrote: post #21

Earlier quoted context omitted.

To eliminate single points of failure, siloing and centralized control. Right now a small group of massive incumbent institutions collect quite significant rents in exchange for providing market access and maintaining custody of funds. This involves tons of transaction costs, slowness, brittleness, mistakes, and of course, severely restricts who by and how these markets can be accessed. Tokenizing securities can open…

What specific transaction costs/rent collecting are you referring to? As a retail investor I can trade stocks for free on Robinhood. My orders get filled instantaneously at the current market price. On other platforms the per-trade fee is a couple bucks, regardless of transaction size. With Coinbase I pay a MUCH larger fee, that is a percentage of the transaction size rather than zero (with Robinhood) or a low fixed…

This comment makes me sad. Lots of bad info.

All securities exchanges incur fees, varying based on wherher you’re eating or supplying liquidity. I forget what these are called, but companies like Interactive brokers pass those fees on. Robinhood eats the fees for you.

With coinbase, you pay a 0% fee as long as you use GDAX, which is a no brainer, and place limit orders that are not immediately executable e.g. sell $.01 above the current price or buy $.01 below.

I’m not the parent so I’m not gonna address the tokenization question, but my opinion is that tokenization helps the users (stockholders), but takes power away from centralized exchanges thus the NASDAQ would be kinda crazy to switch to decentralized assets

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#25

Post by MichaelGG »

guildenstern wrote: post #14
hendzen wrote: post #13

Earlier quoted context omitted.

Why not? Circle (US based) bought Poloniex which is one of the biggest Tether exchanges. If you're Coinbase and you get to buy Bitfinex/Tether at a firesale price + pay some fines to the SEC if needed, why not?

Bitfinex isn’t a company that ignored some AML requirements and they’re not a company just using Tether. They’re the company responsible for tether, they are the creators of Tether. Tether is hugely fraudulent, it’s foundation is fraudulent, they haven’t just avoided some regulations. There’s no way that Coinbase or any other legitimate institution would open themselves up to being responsible for that.

Who has Tether defrauded? I agree Tether may have just issued without backing, but they don't promise being able to withdraw. So who is actually being harmed? And why is it unfixable? What if Coinbase promised to completely cover any usdt shortfall?

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#26

Post by JumpCrisscross »

snissn wrote: post #7
hendzen wrote: post #4

Circle acquiring Poloniex changed the game. The rumored assurances from regulators that Poloniex's prior KYC/AML transgressions would be ignored as long as Circle fixed them going forward was all it really took. Now we are seeing a huge wave of M&A deals while Coinbase uses its very strong financial position to buy up the the less compliant but cashflow-rich overseas exchanges. In particular I wouldn't be surprised t…

> Which begs the question - what tokens are actually worth trading in the first place? I think we're getting closer to tokenizing actual securities. Similar to how TrueUSD is tokenizing U.S. Dollars, I think we're fairly close ( 5 years out) from NASDAQ officially tokenizing their stocks ( as an erc20 on the ethereum blockchain)

Nobody seriously wants equities on a blockchain. Securities need to be able to be split, merged, re-issued, forcibly transferred by courts, et cetera.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#27

Post by MichaelGG »

koolba wrote: post #15
jgh wrote: post #8

Earlier quoted context omitted.

why would they do that?

To finally put an end to flash trading by limiting the total transaction throughput to one trade every ten minutes.

SEC can "fix" HFT instantly by allowing more decimals. There's no good reason to only have 0.01/0.001 increments. Making it so granular forces speed over accurate pricing. Make it 8 decimals and the speed advantage goes away.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#28

Post by __blockcipher__ »

koolba wrote: post #15
jgh wrote: post #8

Earlier quoted context omitted.

why would they do that?

To finally put an end to flash trading by limiting the total transaction throughput to one trade every ten minutes.

Haha. I love me some subtle blocksize jokes.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#29

Post by hendzen »

__blockcipher__ wrote: post #24
hendzen wrote: post #23

Earlier quoted context omitted.

What specific transaction costs/rent collecting are you referring to? As a retail investor I can trade stocks for free on Robinhood. My orders get filled instantaneously at the current market price. On other platforms the per-trade fee is a couple bucks, regardless of transaction size. With Coinbase I pay a MUCH larger fee, that is a percentage of the transaction size rather than zero (with Robinhood) or a low fixed…

This comment makes me sad. Lots of bad info. All securities exchanges incur fees, varying based on wherher you’re eating or supplying liquidity. I forget what these are called, but companies like Interactive brokers pass those fees on. Robinhood eats the fees for you. With coinbase, you pay a 0% fee as long as you use GDAX, which is a no brainer, and place limit orders that are not immediately executable e.g. sell $.…

Re: Robinhood fees. Who cares about the fees that the wholesalers pay -- It's about the end-user experience. And for that matter, you don't seem to understand the full picture on how routing/fees work with retail orders for US equities. Robinhood orders typically get routed to wholesalers like Virtu, Two Sigma or Citadel that actually execute the orders at the prevailing market price on public exchanges. Robinhood gets PAID for that, not the other way around.

Do you really expect the typical person to set a bunch of passive limit orders on GDAX until they get filled? What kind of user experience is that? I would be willing to wager that 95%+ of Coinbase users are just buying and selling directly on Coinbase (and paying the extremely high fees) and have no idea what GDAX is.

Re: Coinbase acquires decentralized cryptocurrency trading platform Paradex

#30

Post by hendzen »

JumpCrisscross wrote: post #26
snissn wrote: post #7

Earlier quoted context omitted.

> Which begs the question - what tokens are actually worth trading in the first place? I think we're getting closer to tokenizing actual securities. Similar to how TrueUSD is tokenizing U.S. Dollars, I think we're fairly close ( 5 years out) from NASDAQ officially tokenizing their stocks ( as an erc20 on the ethereum blockchain)

Nobody seriously wants equities on a blockchain. Securities need to be able to be split, merged, re-issued, forcibly transferred by courts, et cetera .

If someone can honestly explain why the blockchain would be any better than the DTCC for tracking equity security ownership I'd love to hear about it.
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