Cryptocurrency exchange KuCoin has announced a new beta feature allowing users to custody their cryptocurrency while trading.
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According to Forbes, Arwen will give traders “the best of both worlds in terms of the liquidity and speed of centralized exchanges and the security of holding on to one’s own private keys.”
“Decentralized solutions will gain increasing popularity,” said KuCoin President Eric Don.
“For now, most DEXs can hardly provide a service that is as user-friendly and fast as that of their centralized counterpart. We are excited to partner with Arwen to make this bold move, offering the best of centralized and decentralized trading.”
Arwen is a new solution for traders and funds that are averse to holding their personal cryptocurrency assets on a centralized exchange.
With Arwen, traders can securely self-custody their coins while they trade on a centralized exchange.
Arwen trades are executed via a layer-two blockchain protocol that allows traders to benefit from the full liquidity and speed of the centralized exchange order book.
Arwen facilitates secure trading between mutually-untrusting parties by relying on the traded coin’s native blockchain.
Thus, security for trading BTC is provided by the Bitcoin blockchain, while security for trading BCH is provided by the Bitcoin Cash blockchain.
This is in contrast to other approaches, (e.g. WAVES, Binance DEX), which require the introduction of a completely new blockchain that traders must trust.
The first exchange to go live with Arwen is KuCoin.
KuCoin has been granted an A grade by ICORating, and was recently recognized as highly credible in an investigation about exchange trading volumes.
KuCoin leadership has previously been asked about its DEX offering.
Arwen team is led by longtime collaborators Sharon Goldberg (CEO) and Ethan Heilman (CTO).
Goldberg is a computer science professor and Heilman a computer science PhD, both hold several accolades in network security and cryptography, and have contributed to the design of the Bitcoin and Ethereum protocols.
“Since we launched on testnet a few months ago, we’ve seen a bunch of interest from traders and funds wanting to use Arwen to secure their trading operations,” said Goldberg.
“The demand for self-custody is out there. But people often think that self-custody means that trading will be a slow, illiquid experience. With Arwen, we are out to change this conventional thinking.”
Arwen is in talks with crypto funds, hardware wallets, institutional custodians, and other exchanges on their way to establishing Arwen as the new standard of secure trading and settlement.
While the product might be technical, the mission is simple: provide confidence in cryptocurrency trading infrastructure while driving mass adoption of this new asset class.
Arwen is now available, in beta, for trading limited amounts on KuCoin. Users must have a KYC-verified KuCoin account in order to trade with Arwen on KuCoin.
Arwen on KuCoin is not currently available to US residents.