How WazirX mastered uncertainty and came out strong
In most industrialized nations, cryptocurrencies are undergoing regulation that seeks to protect consumers while still enabling investors to benefit from digital currencies. Some countries have even set comprehensive guidance on paying taxes on income generated by mining or participating in airdrops. Nevertheless, this isn’t the lived reality for many citizens in developing countries — who might need cryptocurrencies even more than us.
While people in Europe and the US are slowly getting used to the idea that inflation might be creeping above the central-bank 2% target, inflation is already a lived reality in countries like Argentina or India. Whenever inflation is high, individuals start looking for alternative stores of values, and many start investing in Bitcoin and then other cryptocurrencies. Unless they happened to know someone who sells them Bitcoin for cash, the best avenue to purchase and sell cryptocurrencies is an exchange.
Wazir X is the biggest exchange in terms of trading volume in India and, therefore, the go-to venue for any Indian trader looking to trade their cryptocurrencies. While the exchange is now well-established, it hasn’t always been this way.
Wazir X and the Cryptocurrency Ban
The Indian government has never been much in favor of cryptocurrencies. When interest and transaction volumes picked up again in 2018 after the ICO bubble had burst, the reserve bank of India (RBI) decided to put a two-year ban on cryptocurrencies in place.
At the time the ban began, Wazir X had been around for roughly a year. The exchange was founded by visionaries, including Nishal Shetty, known for making the Forbes under 30 most influential entrepreneurs list as the founder of the Crowdfire Marketing bot. While the team initially launched Wazir X to be purely an exchange, once the RBI started criticizing cryptocurrencies for their lack of intrinsic value, they decided to launch a new product to continue serving customers despite regulatory pressure.
Instead of sitting on the sidelines, Wazir X launched a peer-to-peer exchange on which users can trade in and out of crypto by using USDT. On this p2p platform, users could buy into crypto by purchasing USDT directly from other peers and then using this USDT to purchase crypto. The exact process is repeated vice versa to cash out of crypto, buy selling USDT to someone else looking to get in.
Buyers and sellers are automatically matched, and funds are put into escrow until all details are agreed upon. With the introduction of a new matching engine, confirmation times were cut by 75% enabling most trades to be completed within 15 minutes. Upgrading the matching engine reduced risk for both parties as time funds are locked in escrow was reduced.
The p2p platform saved WazirX from going bankrupt during the cryptocurrency ban. Their proactive approach in dealing with regulations and entrepreneurial spirit helped them master uncertainty. In 2020, when the ban was lifted, they came out as the biggest and most trusted exchange in India. Binance took notice and bought the exchange in November 2019. The peer-to-peer engine is now integrated with Binance’s fiat gateway, allowing traders to buy cryptocurrencies directly with their country’s fiat currency.
Smart Token Fund
While most of the features WazirX offers are similar to all other exchanges — advanced trading interface, automatic order book matching, fast execution — one feature worth noting is their Smart Token Fund.
The Smart Token Fund (STF) brings together traders with experience and skills in managing crypto portfolios with traders who either don’t have the time or confidence to be trading actively. Traders that want to let users trade their crypto can buy a smart token and pass their portfolio to an STF trader to manage it.
The STF trader will then actively manage the portfolio, and as it increases in value, so does the smart token. Traders can then sell the smart token and secure their profit. To guarantee peace of mind to investors, STF traders can only trade the portfolios. Still, they can’t withdraw any cryptocurrency from it, creating a safe environment to bring together investors and skilled traders.
WazirX Token WRX
After Binance acquired WazirX, the Wazir X team launched their own exchange token on the Binance Smart Chain. The WRX token is used to pay for trading fees. When using WRX to pay for transactions, traders benefit from discounts.
The WRX token has recently gained more interest by crypto-traders as the price went up from $0.07 at the beginning of 2021 to an all-time high of $3.50 in early April. Currently, it’s trading around $2.36.
While it remains uncertain how the Indian government is going to regulate cryptocurrencies in the future, the WazirX team has already proven once that they can cope with uncertainty and the fact remains that India is one of the biggest markets in sheer size for cryptocurrencies.
The WRX token is now trading on Bitcoin.com Exchange with USDT and BTC pairs.