Crypto Startup Wants You to Trade on Exchanges Without Trusting Them

A new protocol aims to allow crypto users to maintain control of their private keys while trading on centralized exchanges.

Arwen says, its technology will enable traders to take advantage of the high levels of liquidity available on centralized exchanges without having to trust those frequently-hacked platforms to safeguard their funds.

"Even if the exchange is hacked, even if the exchange is malicious the entire time and goes offline, we don't care," Goldberg said.

While non-custodial trading is also a feature of so-called decentralized exchanges, Arwen notes that such platforms lack the liquidity of their centralized counterparts.

At launch, crypto exchange KuCoin will be integrating a beta version of the Arwen protocol.

The exchange's president and founder, Eric Don, told CoinDesk through a spokesperson that the move may increase user trust in crypto exchange services.

"It's totally understandable to question about the security of such operation. What if the security level of this exchange is not strong enough and gets hacked? What if the exchange takes my money and shuts down? We know some people may have such concerns," he explained.

Don said the exchange conducted security audits on the protocol, and has assessed the overall plan's feasibility.

To integrate the protocol, KuCoin had to develop systems to support the "Request for Quotation" model, as the exchange currently uses a "Central Limit Order Book" model.

"I have to say that this is a bold move in the crypto world. We do not expect a mass adoption among our users in the short term, but we believe as blockchain technology continues to progress, the Arwen system will bring confidence to crypto investors with convenience as well as security."