It was still in it’s beta testing until last month and yet the exchange facilitated $6 Million worth transactions in crypto currency a day. The volume was bound to rise even more, until it got hacked this Tuesday.
Waves DEX was launched in April 2017, this blockchain project was circulating six times the daily volume that a rival DEX, AirSwap proudly claimed at its debut in April. It had 90,000 traders using 330,000 wallets ahead of its full launch this week – making the comparable figures for several others redundant.
The need for decentralized exchanges emerges from the urgency of moving crypto currency around and with as little hindrance as possible. This process eliminates middle man making the transactions smooth and fast. Waves is a unique platform though. It supports fiat tokens also courts banks, yet makes customer identification optional. This is one of the reasons why the system was vulnerable to hacking and phishing in the first place.
Ironically, the platform’s website says:
Waves‘ decentralised exchange is the fastest, most secure and user-friendly DEX in the world.
Other DEX options have taken their time to acquire market share and customer support. The closest competitor, Airswap, was co-founded by a veteran of automated trading firm Virtu Financial Inc. earlier this year. Airswap claimed making a Million USD worth exchanges in a day. This was set to be a new high for a DEX until Waves hit in.
Around $380 billion worth of crypto exchanges handle 99% of the crypto currency circulated in the world. Only $10 to $15 million of these come from DEXs while others have a custodial or regulated background. While models vary, they allow users to trade on a peer-to-peer basis, and without using a platform operated by a single entity. The list of DEX labelled exchanges has been on the rise in the past two years. Although it has not gotten the due attention, the market segment has been hit by a security glitch – the hacking incident.
Tuesday, marked the end of a year-and-a-half-long beta period and Waves officially launched the full DEX. But the day was more eventful than planned. Hackers hijacked both the exchange website and the company’s main site. To worsen it, this was an attempt to phish for users’ personal wallet information to manipulate funds. It took hours for Waves to get its site back online after restoring access to the DNS server.
Waves CEO, Sasha Ivanov told in an interview:
Someone just faked my passport and gave it to support [staff] at the domain company and they changed the password at his request. Then the attacker was able to change the main website.
Such was the ease of the hacker to muddle in the business worth huge in crypto sums. But the CEO remains unaffected or shock ridden. This major obstruction can cause the customer faith to drop to the slug lows. DEX options are more than just a few. People will always have other places to go. And yet the CEO said:
We are looking for partnerships with major banks because we hope major banks will want to issue their own fiat tokens.
Although security is the pre-requisite to market growth and sustainability. Also, the big bank guns hunt for the best protection from fraud, deceit and risk. Such a blow could cloud any future partnerships if the damage control is too weak. The platform has tired it’s best to push the scandal under the rug and say the least on the subject. Because of it’s infancy, the firm is not bashed on the matter on every possible forum as yet. Waves can at best wait for the company to continue enjoying it’s fast climb to the top soon again. And maybe this time, safer and better.