crypto trading bot software

How the Exchange’s Collapse Sparked 5 Good Outcomes and our Crypto Trading Bot Software

1. Introduction

The crypto market suffered a huge blow in November 2022, when FTX collapsed after users withdrew 8 billion USD in funds. This event rattled millions of crypto players, but not so much Oxido Solutions and our trading bot customers. Most of our money and bots were on other platforms, like Binance, OKX and Bybit. We did encounter some challenges, like losing customers, but we recovered quickly and now we have more demand than ever for our trading bot solutions. Looking back at the fall of FTX with a clear view, we can say that this event also brought about various positive changes. In this blog we share 5 good things that we observed and we also introduce a product from Oxido Solutions that we developed partly because of FTX.

2. Greater awareness of platform choices

One of the positive outcomes of FTX is that users have become more aware of the risks and benefits of different platforms. They have learned to do more research before picking a platform. FTX also made many people realize that they should not put all their eggs in one basket. If possible, diversify your portfolio across multiple platforms. Users have also become more interested in the features and security of the platforms, such as the API quality, the liquidity, the fees, the customer support, and the reputation. We see that exchanges are increasingly meeting this information need by providing comprehensive knowledge bases. In our conversations with prospects, we also notice that especially our private customers ask more good critical questions than before the FTX era and do not select a crypto trading bot partner overnight.

3. Enhanced security measures

Another positive outcome of FTX is that platforms have enhanced their security to protect users from hacking, theft, or loss of funds. Platforms have invested more in encryption, authentication, backup, and recovery systems. I personally lost money on small exchanges in the early days of the crypto market when I logged in and my funds were gone. After FTX, those wild west days are hopefully gone for good. Platforms have also become more transparent and accountable, such as publishing their security audits, disclosing their insurance policies, and offering compensation plans for users in case of emergencies. These security enhancements have increased the trust and confidence of the users, and also reduced the likelihood of major incidents.

4. Exchange audits

A third positive outcome of FTX is that exchanges have undergone more thorough and frequent audits by independent and reputable third parties. These audits have confirmed the compliance, performance, and reliability of the exchanges, and also detected and fixed any possible issues or vulnerabilities. These audits have raised the quality and standards of the exchanges, and also provided more assurance and credibility to the users.

5. Off-exchange solutions

A fourth positive outcome of FTX is that off-exchange solutions have emerged and gained popularity. These solutions allow users to trade cryptocurrencies without depending on a centralized exchange. For example, some solutions use peer-to-peer networks, smart contracts, or atomic swaps to enable direct and secure transactions between users. Some solutions use custodial or non-custodial wallets to store and manage the users’ funds. These solutions often offer more privacy, autonomy, and control to the users, and also lower the fees and risks associated with exchanges.

6. Rise in popularity of Dexes

A fifth positive outcome of FTX is that decentralized exchanges (dexes) have risen in popularity and usage. Dexes are platforms that run on a blockchain and allow users to trade cryptocurrencies without intermediaries or central authorities. With a daily volume of 1.6 billion USD (Feb 21, 2023), Ethereum-based Uniswap is the biggest dex. Dexes have several advantages over centralized exchanges, such as lower fees in general, greater transparency, and more resistance to censorship or manipulation. Dexes have also improved in terms of scalability, usability, and functionality, making them more accessible and appealing to users. But why hasn’t Oxido Solutions developed any bots for dexes yet? This is because they have much lower volume than cexes for us. However, we keep an eye on all the progress in the Dex field.

7. Our Crypto trading bot software

As a result of FTX, we at Oxido Solutions have developed a new product called Crypto trading bot software. This software enables users to easily develop their own trading strategies and execute them automatically on 10 exchanges. With this product, we meet the demand of users who want to be more in control and perform as many actions as possible outside the exchange. Some institutional parties use our software in combination with off-exchange solutions such as ClearLoops. This means that they can execute their strategies on an exchange without leaving ClearLoops’ secure custody, where their funds are also fully insured. I really like ClearLoops’ solution, but it is relatively expensive and therefore mainly accessible to institutional parties. Hopefully, similar solutions will be developed for retail customers soon. How amazing would it be if everyone could trade safely and affordably off-exchange in the future…

Disclaimer: The opinion expressed in this LinkedIn article is for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.