Binance, one the world’s most coveted cryptocurrency exchanges is spreading its wings into a newer market as it announced its acquisition of the crypto asset trading platform JEX. The exchange made the acquisition official with its announcement on Sept. 2, setting foot in arguably one of the most heated markets in the cryptocurrency trading realm
With the little-known derivatives platform under it wings, the world’s largest crypto exchange platform by daily trade volume is ready to break into the futures market.
— Binance (@binance) September 2, 2019
JEX, though not very popular, happens to be the first crypto asset-trading platform to have launched option trading in the world. It is a rather innovative blockchain project, what makes it stand out is the fact that its derivative trading platform is dedicated to the two kinds trading model.
Most of the platforms in the crypto space only support a single mode of exchanging cryptocurrencies, and only support the most basic listing process, while never participating in the funding of any project. Which accounts for gaps in the disclosure of prices and in the conveyance of trending information. JEX fills those gaps by providing a professional trading platform that supports multiple trading models/derivatives trading and reveals important trending information.
Now that Binance has acquired the Seychelles based trading platform, JEX will be going through the process of being rebranded as Binance JEX, which as per the press release, will be offering derivatives products to its consumer base, including futures, options, and perpetual contracts. The announcement read:
JEX will join the Binance ecosystem as Binance JEX and focus on further building the crypto-asset derivatives market.
This acquisition however, isn’t like any other because JEX will have to compete in order to prove it self. The question arises, what will the newly acquired platform be competing with? Well, Binance for its part has been on its on futures trading platform internally and the platform. Over the next few weeks, the exchange will be allowing its clients to trade on both the platforms, JEX and the one developed by Binance, in order to get a clear picture of which is superior.
According to the announcement, Participating traders who will be beta testing the two platforms can vote for their favorite platform for a chance to win up to 10,000 BNB tokens, which is equivalent to about $216,000 at the time of publishing. While referring to the battle of the futures, a Binance spokeperson reportedly said:
We think open competition is a great way to test out the products’ usability. Through the competition, we hope to fully review the two products in terms of market feedback, scalability, and liquidation model design. It’ll help with the ultimate decision-making.
The winner of this battle is totally customer dependent, which will then set Binance’s strategy in motion. However, regardless of the outcome of this competition, because of the acquisition, Binance will be obliged to manage JEX responsibly, as well as its tokens and Binance JEX will remain a part of the platform’s ecosystem.
Binance co-founder, Yi He acknowledged the fact that JEX has a seasoned developer team with proven experience in crypto-asset product development, while also adding that they have developed solid derivatives that align with Binance’s product roadmap in the crypto asset derivatives market. He further added:
We hold an open mind and welcome more partners to join the Binance ecosystem. We look forward to delivering more innovative derivative products in the future as Binance JEX.
It is no secret that Binance’s strategy revolves around broadening its ecosystem and spanning over different areas in the crypto space. The crypto exchange first revealed that it would be entering the derivatives market back in February and now with the debut of its platform, Binance is setting foot in arguably one of the most heated markets in the cryptocurrency trading realm.
Binance has some real competition cut out for it, since the derivatives market already has some established brands, one of them being BitMEX, the cryptocurrency exchange giant that pioneered the financial instrument.
Deribit is another established name in the derivatives market, which was founded back in 2016 in Netherlands. Both the aforementioned platforms have reportedly seen a continuous growth in their volumes in recent months.
Another competition for Binance goes by the name of CoinFLEX, which specializes in physically settled futures contracts, recently raised $10 million and launched a market-making incentive program to boost its market share.
In short, Binance is going to be facing some fierce competition in this new market. However given the exchange’s popularity and huge existing customer base, it’s safe to assume that it will put up a legitimate fight to make its place in the market.