Grin churns the exchange
Text | Xue Jiao, Dave
Grin, the first "catfish" of 2019, is stirring up the entire exchange market.
On January 24 alone, two exchanges, KuCoin and CoinAll, listed Grin successively. In the queue to launch Grin, there are also shadows of the three major exchanges.
According to a person close to the Grin core development team, one of the three major exchanges is connecting with the Grin core development team in order to launch Grin as soon as possible.
It is the small exchanges that are the first to provoke the banner of Grin and grab the early dividends. Some of them have achieved 30% PV growth or even 100% user growth by launching Grin.
After colluding with the mining pool and fighting openly and secretly, I never want to give up the fat I got to others.
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Staged user competition for "Infernal Affairs"
If it is said that before Grin, the common understanding of the project in the currency circle was the assembly line work of cornerstone round, private placement, exchange issuance, and market value management, then the emergence of Grin broke people's inherent perception.
In the world of Grin, there are no project parties and core developers relying on donations to support them, and there is also a lack of "bankers" who sit in the market. Only Grin miners who are constantly looking for buyers remain.
Grin is an anonymous currency based on the Mimblewimble protocol. The design mechanism has many similarities with Bitcoin, such as the underlying protocol and projects are published by anonymous people; second, the team does not accept investment, and all Grin can only be obtained in the form of mining. This kind of decentralization and idealism has allowed Grin to be recommended by many big names in the currency circle.
However, Grin's monetary policy is innovative compared to Bitcoin. Its design does not set an upper limit on issuance, and it grows steadily. It is hoped that there will be no inflation or deflation.
After three years of research and development, Grin finally went live on the mainnet on January 16, 2019.
Prior to this, Grin has been popular in the currency circle for a period of time because of these characteristics, and now this whirlwind has begun to blow to the mining circle and the secondary market.
However, Grin's anonymity mechanism poses a lot of challenges to miners and coin holders. As F2Pool founder “Shenyu” said, Grin is a disaster for industry beginners. The first problem is that supporting links including wallets are still missing.
Wang Fuqiang, partner of the exchange BitMesh, explained Grin’s transaction storage mechanism in this way: “This process can be understood as a face-to-face transaction, which is safer. If A transfers money to B, and B’s wallet is offline, the transfer at this time The coins will be frozen. At this time, A has two options: the first is to cancel the transfer, and the coins will be returned to the wallet; the second is to wait for B’s wallet to go online, and then the transaction is successful.”
If the miners can't handle the wallet, they can't withdraw coins. At this point, the exchange becomes the only way for Grin to flow. Users can withdraw coins to the exchange for cash, or store them in the exchange first.
Since the coins mined from the mining pool always flow to the exchange, there is room for manipulation wherever the flow goes. According to Wang Fuqiang, in order to attract more users, some exchanges may reach some kind of cooperation with mining pools to obtain opportunities for priority diversion.
The specific operation method is that the mining pool will recommend some exchanges on the miner’s withdrawal page. Just like Baidu's webpage ranking, the top-ranked webpages may have a higher click-through rate. After the miner successfully withdraws coins to the cooperative exchange through the link of the mining pool, the exchange will return points to the mining pool.
This judgment is not based on imagination. A miner who did not want to be named said that the Grin withdrawal page of the UU mining pool was once connected to only one exchange, Bifu.
In addition, according to Wang Fuqiang, BitMesh also encountered a mining pool that took the initiative to seek "cooperation".
On January 18, the transaction volume of BitMesh on the whole network rose rapidly. For example, the Spark Mining Pool produced about 20,000 Grin on that day, and nearly half of the coins flowed to BitMesh.
At this time, BitMesh received an olive branch from a former Five Mining Pool. The mining pool made an open bid to BitMesh, saying that as long as BitMesh gave the mining pool a 1% rebate, the mining pool would divert traffic for BitMesh; it also claimed that it had reached cooperation with other exchanges.
When the collusion between the mining pool and the exchange became the default unspoken rule, the exchange and the exchange were also full of intriguing "scrambles" before.
For example, in order to win users, some exchanges undercover competitors' WeChat groups, and staged "infernal affairs" to compete for Grin users.
The first two days of launching Grin were the busiest. Developing an automatic deposit and withdrawal system, solving new network and new user problems, kept the BitMesh team with a total of seven people very busy.
Wang Fuqiang told Odaily that at that time, several members of the team made their beds in the office and worked day and night for several consecutive days.
"At this moment, there are still competitors sneaking into our customer base to make troubles. It's really dumbfounding." Wang Fuqiang waved his hand and said.
"How do you know it? When they entered our customer base, they acted as a double act, asking and answering, saying how good XX Exchange is, and trying to pull customers over."
Is it possible that real miners are spontaneously sharing their experiences?
Wang Fuqiang denied this judgment. "I was also wondering if the XX exchange is really useful. But then I found out in many Grin groups that those few people were saying the same thing over and over again. After a long time, I found out that they came from the XX exchange."
"They also pretended to be our users and asked a lot of questions, which took up a lot of time. Later, they used all kinds of clichés, wanting to know how our automatic deposit and withdrawal system works." Wang Fuqiang said.
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Triggering a wave of currency listings on exchanges
Under the bear market, exchanges are no longer at the top of the food chain. From the three major exchanges to small and medium-sized exchanges, the income has dropped sharply, and they have to shrink strategically in order to survive.
Grin's star power has brought waves to this long-struggling market.
Wang Fuqiang told Odaily that BitMesh only gained more than 10 users within half a month after its launch. Until BitMesh launched Beam, which uses the same protocol as Grin, it finally ushered in 200 users, and the launch of Grin increased this number to thousands. The explosive growth of users also allowed this small team to temporarily achieve breakeven. Wang Fuqiang said that BitMesh's current daily turnover is 30+ BTC, most of which come from Grin's transaction fees.
Bifu CEO Garrett Jin said that after the launch of Grin, Bifu’s PV (visit volume) and UV (unique visitors) achieved a growth of more than 30%.
Under this grand occasion, a large number of exchanges are scrambling to list Grin.
According to incomplete statistics from Odaily, as of January 23, more than 20 exchanges such as Bibox and KuCoin have actively listed Grin.
However, while Grin injects the light of the bear market into the exchange, it also brings new competition and challenges.
On the one hand, there is no listing fee to collect Grin on the exchange, and you have to study technology and configure wallets at your own expense; secondly, Grin is no different from previous ICO projects, it has no project party and market maker, and the price fluctuates greatly Low liquidity will also bring some bad experiences to investors.
According to the network-wide data collected by Mytoken, Grin jumped from 9 am on January 17 to $19.2 and then plummeted. As of 1pm on the 23rd, the price of Grin has dropped to $3.26.
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Liquidity is a problem facing these small and medium-sized exchanges.
When asked about the most urgently needed resources at present, Wang Fuqiang told Odaily; "We especially need market makers to provide liquidity by quantifying and moving bricks, otherwise it will be difficult to provide a good user experience."
For this reason, Wang Fuqiang even expressed his willingness to sell shares to cooperate with market makers.
Providing liquidity is like a chicken-and-egg problem. Because there is no liquidity, a market maker is needed, but it is difficult to quantify without a liquidity market maker. In particular, Grin, a project that didn't have an ICO, didn't even sponsor a market maker.
Chang Kai, a trader who wants to buy and sell Grin arbitrage between exchanges, told Odaily, "The speed of moving bricks is very slow now. We tried to move bricks between two exchanges with a big difference in Grin price, but because of the exchange's technical The problem is that the withdrawn coins did not arrive in time, and after waiting for an hour, the market has long since disappeared.”
In short, it may be difficult for a large number of market makers to unwind Grin holders at this time.
It is also because of the liquidity problem that some exchanges and users (mainly Grin miners) have irreconcilable conflicts.
On January 22, miner Li Shaomao called on miners to unite in the group, "If Bifu on the 23rd cannot withdraw cash, we will jointly report to the Public Security Bureau, saying that Bifu is fraudulent and illegally opened an exchange."
The miners in the group also complained a lot about the practice of the coin holders who can only deposit coins but not withdraw them.
Li Shaomao told Odaily that on January 17, major mining pools began to issue Grin to miners. At that time, the exchange was opening a high-priced buy order. At the highest point, one Grin could sell one BTC. After seeing the price, the miners referred the coins to the exchange recommended by the mining pool.
Li Shaomao hit his Grin on Bifu in such a jealous situation. But at that time, he did not see the announcement that Bifu Exchange would be able to withdraw coins on the 23rd.
On January 15, Bifu Exchange issued an announcement before launching the Grin trading pair, saying that it will be able to withdraw coins on January 23 (that is, 7 days after the deposit is opened).
Li Shaomao discovered this "hidden rule" when he sent coins to the exchange and was about to sell them. Li Shaomao couldn't understand. He didn't understand why the exchange kept the user's coins for so long. At the same time, other exchanges provided coin withdrawal services while opening deposits.
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"Catfish" stirs up the three major exchanges
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Data from:MiningPoolStats
This may imply that OKEx will soon list Grin.
In addition, the screenshots that appeared in Grin’s discord official community also showed that the word Grin also appeared in OKEx’s API.
In this regard, Odaily asked OKEx for confirmation, and the other party said that "we can only wait for the notification, and there is no clear news to be listed (Grin)".
Perhaps, the three major deals have already begun to covet the Grin cake.
According to a person close to the Grin core development team, in addition to OKEx, one of the three major exchanges is connecting with the Grin core development team in order to launch Grin as soon as possible. On the other hand, Wang Fuqiang revealed that due to the cumbersome process and complex risk control system of large exchanges, it will take a relatively long process to launch Grin.
But what should come will always come. "Now that the exchange industry is so crowded, if big-name exchanges want to list Grin, small exchanges will almost have no chance." Wang Fuqiang said.
On the afternoon of January 24th, the KuCoin exchange announced the listing of Grin. Less than 4 hours later, Coinall also announced the listing of Grin. This forces most exchanges to hurry up and prepare to launch Grin, just to seize this "opportunity" that has been eaten by some people.
Grin broke into the exchange market as the first catfish in 2019, giving hope to new exchanges like BitMesh and sounding the alarm for the three major exchanges.
Relying on its mobility and flexibility, the small exchange set off with all its strength as soon as the starting gun fired, and finally got the first pot of gold before the big one came in. Prior to this, it was vain for small exchanges to compete with large exchanges for stock users.
The world of exchanges needs more currencies like Grin, so that innovative exchanges can continue to challenge the authority of major exchanges, and let investors recognize the true capabilities of exchanges.
(I am the author Xuejiao, you can add WeChat hxjiapg for mining and blockchain reports/communication, please note your position and reason)
