CoinEx is one of the newer cryptocurrency exchanges, having been in operation since December 2017, but it’s already been making big news; first with its heavy emphasis on Bitcoin Cash, and more recently with its addition of Trade-driven mining.
Moving to a new exchange can be beneficial in the form of new altcoins to trade and lower fees. There are also risks associated with trading on untested exchanges, so it’s good to take your time and learn all you can about a new exchange before jumping ship to take advantage of lower fees and different cons, and in the case of CoinEx Trade-driven mining.
CoinEx is registered in the U.K., but has its operations in Hong Kong, and it first appeared as a cryptocurrency exchange in December 2017. While the principles tried to keep it quiet, the company behind CoinEx is none other than ViaBTC, the Chinese cryptocurrency mining pool that had its Chinese exchange closed down in September 2017.
The exchange had quite a roller coaster ride recently as it saw its trading volume spike from $5 million in June to $1.5 billion in early July after announcing its controversial Trade-driven mining. That surge took it past Binance to the #1 spot in exchange volume, but only briefly. By late July it had dropped to #25 in exchange volume with $62.5 million in trade volume and as of August 2018 it has fallen even below its June numbers. It is currently the #126 exchange with just $830k in trade volume.
Because CoinEx is owned by ViaBTC some wonder if it’s truly a reputable exchange, or just another honeypot scheme. ViaBTC launched the site in less than two months after the infamous Chinese crackdown on cryptocurrency exchanges that wiped the slate clean in China. They had to close their China based exchange, but quickly pivoted to resume operations in the U.K. and Hong Kong. While some question the trustworthiness of CoinEx, it seems as if ViaBTC was just following good business practices in pivoting to a new exchange in a new jurisdiction.
CoinEx was built to be a suitable trading platform for both beginners and advanced users, however the lack of leverage or margin trading may disappoint some more advanced traders. Even so, the exchange has some distinct advantages:
CoinEx was designed around a multi-process matching engine capable of processing thousands of transactions in a second. The weakness in many blockchains is a lack of speed, and CoinEx knew that one thing an exchange certainly needs is speed. CoinEx transactions are speedy, efficient and inexpensive.
Safety of Funds
CoinEx guarantees client funds 100% and claims to keep client and operational funds segregated. This means client funds are always fully available for withdrawal, and they cannot be used for any other purpose, such as funding company operations.
CoinEx is able to provide world-class client protections by implementing numerous security protocols (including advanced SSL protocols). The user’s safety is also enhanced by the usage of cold multisig wallets and enabling 2FA. While all exchanges tenaciously make an emphasis on security issues, it is important to remember that hacking attacks are still quite mundane, so extreme safety should be a top priority while choosing an exchange.
Even though leveraged or margin trading is unavailable at CoinEx, it is still an advanced platform for trading. Charts are powered by TradingView, giving users the ability to use dozens of indicators to get an in-depth view of market conditions at any time.
CoinEx Coin and Currency Support
CoinEx shares one feature with many cryptocurrency exchanges, and that’s its lack of support for fiat currencies. Deposits, withdrawals and trades are only in cryptocurrencies.
With that said, CoinEx has support for dozens of altcoins, with the largest number of pairs coming from Bicoin Cash. Bitcoin is close behind, and there are nearly as many Bitcoin pairs available. Ethereum is a far third, with about half as many pairs to trade, and USDT is the laggard, with under a dozen pairs available.
The decision by CoinEx to use Bitcoin Cash as its main base currency was an interesting one at the time, and it’s paid off by providing the exchange with faster transactions and improved performance overall. While some thought it could also increase the change of a slow flippening, the lower volumes at CoinEx haven’t seen that taking place.
In addition to the other coins offered CoinEx has also issued its own ERC-20 token called the CoinEx Token (CET). Holders of CET tokens can take advantage of certain privileges such as voting rights and discounts on trading fees. Currently the value of one CET is $0.0467 with a total supply of nearly 10 billion tokens.
How to Use CoinEx
Currently users from all across the globe are able to register for a CoinEx account and use the exchange service. For absolute beginners here’s a quick guide on how to register and use the exchange.
Step 1: Click on the “Sign-up” link in the upper right corner of the site. Fill out the simple registration form as seen below:
Step 2: Once your registration is complete you can log into your account and go to the “Exchange” section where you’re able to see all of the assets available to trade. Note the list on the left that shows all the trading pairs and can be sorted by BCH pairs, or BTC, ETH and USDT pairs.
The middle of the page is reserved for a candlestick chart to assist in your trades. The charts are provided by TradingView and include dozens of technical indicators to make your trading decisions even easier. Unfortunately, even though most of the site is translated to English, there are some indicators that haven’t been translated from Chinese, which could make using the charts difficult if you’re not a Chinese speaker.
To the right of the chart is an order book showing all the open orders, and beneath the chart is the order form where you’re able to place a market or limit order for whichever pair you’d like to trade.
CoinEx announced what it calls Trade-Driven Mining on July 1, 2018 and the daily volume of the exchange rocketed from $5 million to $1.5 billion in the following days. That took the exchange briefly to the number 1 spot on Coinmarketcap for exchange trade volume, eclipsing even Binance, and leap-frogging some 70-odd spots. The gain didn’t last and as of mid-August the exchange has dropped to roughly $1.3 million daily trade volume.
The Trade-Driven Mining program is set to run for 180 days and is a way for CoinEx to release more of its CET tokens.
Per the CoinEx website:
“We will calculate 100% of our transaction fee income into CET against the real-time rate and give them away to all traders proportionately to their trading volume.”
We can see why the trading volume dropped because as of July 12 CoinEx added an additional requirement that traders hold and lock a minimum of 10,000 CET to me eligible to receive coins in the Trade-Driven Mining scheme.
Some have claimed that the scheme is nothing more than CoinEx converting BTC and ETH into their own CET tokens, and that to be successful the value of CET will need to rise substantially. We haven’t seen much rise in the price of CET, and given the drop in trade volume it doesn’t look as if the scheme remained very popular.
One very attractive feature at CoinEx is their extremely low fees. There are no maker fees and the taker fee is a very low 0.1%. In addition, CET holders can take advantage of a 50% fee reduction, making trading fees almost non-existent at CoinEx for CET holders. There are still withdrawal fees for all the cryptocurrencies with the exception of Bitcoin Cash.
CoinEx was launched as a replacement of a Chinese exchange after the crackdown on cryptocurrencies in China. That doesn’t make the project any less ambitious as it seeks to develop a decentralized exchange and its own token ecosystem. The dividend is a good feature for now and can provide a small daily income. The extremely low fees are also a big advantage to trading with CoinEx.
Of course the lack of support for fiat currencies makes this an exchange primarily for experience cryptocurrency investors.
The exchange is unregulated, like most cryptocurrency exchanges, and some say that the ViaBTC ownership is a bad thing, but in actuality I think it’s a positive since the owning entity has too much to lose to scam clients, and also had deep enough pockets to continue making improvements to the platform. Overall a good, if small, exchange, and one that could grow significantly in coming months.