How Indian crypto exchanges are weathering the storm?

Hello, fellow Olio enthusiasts! 👋

Happy Hump Day and welcome to the 29th edition of Weekly Olio - your weekly dose of giggles, wisdom, and a sprinkle of intrigue with our tantalizing thought piece (yes, we're talking about Publisher's Parmesan here). 🤭

A big shoutout to all of you for the fantastic support and feedback. Let's keep the momentum going in the days and weeks ahead! 😊

The last one week has been wild with Nvidia becoming a $1Trillion company on the back of AI and Apple announcing its much awaited mixed reality headset called Vision Pro - as users of Meta’s Oculus, this thing looks pretty cool.

Before the week came to an end, the global venture capital industry saw a major shakeup with stories venture capital firm Sequoia splitting into three firms: a US/Europe focussed entity still called Sequoia, an India/SEA entity to be called Peak XV Partners and a China to be known as HongShan. Each of these firms will operate independently in their own geographies. The stated reason seems to be the increasing global overlap among the portfolio but the jury is still out. The Chinese franchise was especially lucrative and was responsible for investing in some serious money-spinners like Meituan, Pinduoduo and Bytedance. Whether it was just portfolio overlap or increasing geopolitical tensions - hard to say.

Here is an interesting read from Forbes covering this shakeup:

Now, onto regular coverage.

Today’s Publisher’s Parmesan talks about how Indian crypto exchanges are weathering the storm.

Exciting, right? 👏

Will come to that, but let’s first start with the curation.

Oh, and before you continue, it's time for some sponsor spotlight! Don't worry, it's not clickbait, it's just our way of 'feeling the ad-vantage'. So, do click, and help us keep the lights on and the puns rolling! 😀

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The Quote󠀢 💭

The Tweet 🐦

A key finding from the index is what they call the “direct link between passport strength and access to the global economy.”

For example, the Japanese passport gives visa-free access to 193 destinations, which accounts for a whopping 98% of the global economy. On the other end, citizens of the index’s lowest-ranking countries such as Afghanistan, Iraq (visa-free score of 29), and Syria (visa-free score of 30) are effectively shut out of various opportunities for economic mobility and growth.

The Infographic 💹

If the entire history of the earth were to be squeezed into 24 hours, humans have been around for less than 2 minutes. While it took some time for the first living organisms to transform into dinosaurs, the transformation from dinosaurs to the creation of humans was pretty fast i.e., it shows the pace at which evolution works and adapts!

The Short Read 📝

The $40M bet that made South Korea a food and cultural power - by the Hustle

Gastrodiplomacy, a term first coined by The Economist in 2002, happens when governments try to increase the value and knowledge of their nation through food. Though the term was born in the 21st century, the tactic can be traced back to the Greeks and Romans inviting their adversaries to the table to break bread, drink wine, and settle arguments.

But can food really help elevate a country’s reputation? And how much further can South Korea push its food campaigns?

Fourteen years later, the success of South Korea’s gastrodiplomacy is evident.

In 2018, a poll from the Korean Food Promotion Institute indicated ~88% of US residents were satisfied with Korean food. Meanwhile, the Anholt-Ipsos Nation Brands Index, an indicator of a country’s popularity for investment and travel, ranked South Korea 23rd last year.

The Long Read 📜

This time, it feels different - by Kailash Nadh

Kailash Nadh has a PhD in Artificial Intelligence & Computational Linguistics. He has been the CTO at Zerodha since 2013, where he co-founded its tech arm. Zerodha is the largest stockbroker, and one of the largest fintech companies, in India.

While AI has been around for a long time, most of its applications were limited to very specific and niche use cases. ChatGPT’s ease of implementation and its wide range of possible applications has brought us face-to-face with AI’s capabilities. Companies - both big and small, have been scrambling to create their own AI strategies. The world of tech is not new to this kind of hype cycles but the piece argues that this time, it might actually be different. The current AI wave might actually signal a paradigm shift - something that fundamentally changes the way we live and work.

At Zerodha, for example, the implementation of GPT-4 could make almost 20% of jobs obsolete. These kinds of efficiency gains were unheard of earlier. On the other side, AI has also raised anxiety among white-collar workers and hairy questions for policymakers. How this wave plays out, only time will tell.

Publisher’s Parmesan 🧀

How Indian crypto exchanges are weathering the storm?

Notwithstanding the current bear market, India’s leading crypto exchanges have continued to announce new products and features, and taken measures to be seen as safe, secure and trustworthy.

Crypto winter is here. The Terra (LUNA) ecosystem and FTX took a tumble in 2022, leaving us in the icy grip of a bear market. Crypto firms worldwide are feeling the chill, either downsizing, hitting the brakes, or revising their grand plans in response to these frosty market conditions.

But wait, it gets frostier in India! The government decided to pour a bucket of ice-cold water on crypto profits with a hefty 30% income tax. Crypto firms in the country are crying foul, demanding a fairer approach to taxing and regulating digital assets.

And can you blame them? The current tax slab has turned the trading volumes in Indian cryptocurrency exchanges into a chilly breeze. It's like the snowstorm has settled over their hopes of flourishing in the crypto landscape.

The tale of WazirX and CoinDCX, once mighty crypto exchanges in India, has taken a dramatic turn. Their daily trade volumes, once soaring in hundreds of millions of dollars, have plummeted to a measly million dollars. Ouch!

For these exchanges, trade activity is their lifeblood. Transaction fees dance in their dreams as the main source of revenue. But with such colossal declines in trading volumes, their revenue streams have frozen over like an Arctic lake.

Yet, amidst the doom and gloom, there are glimmers of hope. These exchanges are not surrendering to the frosty winds of fate. Instead, they're rolling out new products, services, and features, as if they're saying, "We won't be confined to the frozen realm of order-book-based crypto transactions!"

They're preparing for the next bull run, gearing up for warmer times ahead. And to win the trust of their users, they're even publishing transparency reports on their asset holdings, taking a page from the playbook of crypto giants like Binance.

CoinDCX’s foray into Web3

Mumbai-based CoinDCX is working on a Decentralised Finance (DeFi) app named Okto, which it says will allow users to access Decentralised Apps (DApps) and tokens and act as a self-custodial wallet.

Okto was announced in August, prior to the FTX debacle. According to the company, this foray into deeper Web3 domains was in the works for a long period of time and was not a direct response to declining trade volumes.

Coinswitch’s multi-exchange platform

The Bengaluru-based Coinswitch is not one to be left behind in the race towards Web3 adoption. They've got their eyes set on the next phase, and in November, they made their move. Enter Coinswitch Pro, a magnificent multi-exchange trading platform that allows users to effortlessly trade crypto across Coinswitch, CoinDCX, and WazirX, all with a single login. Talk about convenience!

Coinswitch Pro aims to be the superhero of trading platforms, uniting these exchanges under one roof. No more juggling multiple logins or switching tabs frantically. With Coinswitch Pro, users can seamlessly navigate the crypto universe, capturing opportunities across different exchanges without breaking a sweat.

It's like Coinswitch said, "Why limit yourself to just one exchange when you can have them all? Let's bring them together and make trading a breeze!"

So, as the crypto world ventures deeper into the realms of Web3, Coinswitch is proudly striding forward, offering traders a unified gateway to explore, conquer, and trade their way through the crypto landscape. The future is looking bright for Coinswitch Pro and the traders who embrace it.

While others are busy announcing new ventures and exploring uncharted territories, WazirX, the steadfast player in the crypto realm, has chosen a different path. They have no intentions of launching flashy new offerings or chasing after the latest trends. Instead, they are doubling down on what they do best: enhancing the user experience on their crypto trading platform.

Doubling down on Proof of Reserves and Native tokens

One of the key factors contributing to FTX's collapse was its very own FTT token, which allegedly played a role in a rather dubious manner. It is said that FTX misused customer funds and manipulated the FTT token to conceal losses incurred by its sister company, Alameda Research.

In light of this cautionary tale, both CoinDCX and Coinswitch made a prudent decision to prioritize the safety and well-being of their customers. They chose not to follow the path of issuing native tokens, a move aimed at shielding their users from unnecessary risks. However, there is always an exception to the rule, and in this case, it's WazirX with its native token, WRX, which was introduced back in 2020.

In the midst of growing scepticism surrounding centralized exchanges, a wave of change is sweeping through the crypto world. Many exchanges are now embracing transparency and accountability by issuing Proof of Reserves (PoR) documents. These audit documents provide an easily verifiable snapshot of an exchange's reserves, allowing external parties to scrutinize and verify their holdings.

In India, WazirX is diligently working on releasing its own PoR, aiming to showcase the robust security measures in place to protect user funds on its platform. CoinDCX took a step ahead by publishing its PoR back in November, while Coinswitch took a different approach by citing an independent third-party audit that confirmed their holdings matched customer investments.

These measures demonstrate a united front among Indian crypto exchanges, as they strive to be perceived as safe, secure, and trustworthy. They understand the importance of instilling confidence in users, especially when the next bull run comes knocking at the door. By embracing transparency and accountability, they hope to onboard new crypto users who are seeking reliable platforms to engage in the exciting crypto market.

In a world where trust is paramount, these Indian exchanges are paving the way for a new standard in the industry. By showcasing their commitment to security and openness, they're building a solid foundation of trust that will ultimately strengthen the crypto ecosystem as a whole.

Wanna know what else we are reading? 🙃

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