Popular cryptocurrency exchange Coinbase has announced plans to shut down its cryptocurrency exchange GDAX to launch the brand new Coinbase Pro which will cater specifically to crypto-traders. This news came after their announcement that they purchased Paradex, a peer-to-peer trading platform for ERC20 tokens.
Paradex is a trading platform built on top of the 0x protocol and it allows for exchange settlement without the need for user accounts or taking custodianship of their funds. Meaning, you hold your own private key.
Paradex will be integrated into the new Coinbase Pro product in the coming weeks, the company said.
A key distinction between Paradex and other exchanges is that it does not hold tokens on behalf of its customers. Users instead trade peer-to-peer, directly from their own “wallets.” Coinbase in contrast, acts as a trusted custodian for digital assets on its exchange.
With this move, Coinbase is expanding beyond trading Bitcoin, Bitcoin Cash, Ether and Litecoin. It has functioned as the middleman in transactions of those coins and kept custody of the underlying digital tokens. Trading over Paradex will link customers directly with one another outside of Coinbase’s exchange. Coinbase is still working out whether and how it will implement a fee structure.
