New Australian crypto company XS2 Exchange launched this week. Its mission is to completely rethink what a crypto exchange should look like, make it simpler to use and deliver better security, transparency, and support.
XS2 works with the regulators to stay compliant and is registered as a Digital Currency Exchange and Independent Remittance Dealer and is also a member of the Australian Digital Commerce Association (ADCA).
While trading across many different sites over the years, XS2 co-founder Bart Jellema got fed up with the lack of support, usability, and openness of the exchanges he used and the funds he lost from hacks.
He says, “Most exchanges were created for tech-savvy hobbyists, early adopters or professional traders. Yet most customers are retail investors, who are hesitant to use many of the current exchanges, and for good reason. So we’ve looked at the requirements and needs of this group, to create an exchange that is easy to use and that you can bank on.”
Wallets, Trading and News in one screen
The exchange currently supports over 60 different assets, such as Bitcoin, Ethereum, Ripple, Litecoin, Stellar and NEO. Many popular Ethereum tokens are listed, including OmiseGo, Zilliqa, Pundi X, RChain, Holo, Golum and Mithril. New tokens are regularly reviewed and added without charging large listing fees to the projects.
As part of the launch, customers who sign up receive a basket of tokens, including the XS2 Token, that can be used to pay for trading fees. Currently, the basket includes some XS2, Pundi X, Holo, and Dogecoin.
The main dashboard combines wallets, trading, deposits, and withdrawals as well as coin news and information on a single screen. To make the exchange more accessible to customers that are new to trading, the interface uses plain English instead of industry jargon.
There is a news feed that aggregates over 160 news sources and the information page for each listed token shows related news items.
Many exchanges and even more of their customers have been the victim of hacks. The team at XS2 studied these hacks and found that most of them involved funds connected to the internet, so-called hot wallets. When these get compromised, the funds in them can instantly be stolen, transferred and lost forever.
To prevent these type of attacks, XS2 keeps all customer funds offline and the bulk is stored off premises in multiple commercial vaults with bank-grade security. According to Jellema, this doesn’t make things easier because “adding support for coins is much harder with an offline only solution. But we don’t compromise on security, so we put in the work and already integrated with eight blockchains, including Bitcoin, Ethereum, Ripple, Stellar and NEO.”
Many exchange customers have lost their funds through phishing attacks or SIM swaps. Using two-factor authentication (2FA) hasn’t been very effective in stopping these attacks and create headaches for customers who lose their phones.
XS2 uses a system of authorized devices with XSKeys to defeat most of these attacks. Since trades and transfers can only be made from authorized devices, funds will still be safe even if a customer’s password is compromised.
When designing the security for the exchange, XS2 says it made three assumptions: Customers have weak passwords, customers lose their phone often and we shouldn’t have to “educate” customers how to stay safe. Using this as a basis for design, it came up with a system that is both more convenient and more secure.
Proof of Solvency
The proof of solvency allows customers to check that all the funds are actually held by XS2. Addresses of all cold wallets are available and the customer can independently verify the balances on the blockchain.
I’m very excited about the launch, because I believe the industry is missing an exchange where you can put your funds and trade with confidence. And I think we’ve created just that, taking us another step closer to mainstream adoption of cryptocurrencies and the blockchain.”