Everybody needs a place to trade cryptocurrency. Luckily, the majority of countries within the developed world now have large platforms to go and trade their cryptocurrencies at, such as Binance or Coinbase.
However, investing in cryptocurrencies within developing nations is extremely limited as regulators continue to try and enforce different types of cryptocurrency bans.
Regardless of this, there are still cryptocurrency exchanges within these developing nations that are offering their services to their country. One of these exchanges is India’s largest and most trusted crypto exchange, WazirX.
WazirX has been through hell and back over the past few years as they managed to ride out the uncertainty that stemmed from the 2-year cryptocurrency ban that was enforced by the Reserve Bank of India in 2018. They managed to survive this through very intuitive practices which actually caught the eye of the largest exchange in the world, Binance, causing them to make an offer to acquire the Indian based exchange.
To learn more about how WazirX battled against the Indian cryptocurrency ban and managed to catch the eye of Binance, read on...
What is WazirX
WazirX is a centralized cryptocurrency exchange that is based out of India and is actually India’s largest cryptocurrency exchange by volume.
Their platform has an advanced trading interface with a live order book system that includes over 80 cryptocurrencies that are available to trade.
The entire platform has a wide range of different features, the majority of which are available on most cryptocurrency exchanges. However, some of these aren’t available on any other exchange in the world (marked in bold). These features include;
- The actual WazirX Exchange - The main exchange for users to trade crypto in India
- WazirX P2P Exchange - A unique method of flowing into and out of cryptocurrency with fiat through the use of USDT through their automatic order matching system
- Trading Reports - In-depth reports of a traders trades
- Smart Token Fund - A method for investors to find traders to trade their portfolio for them
- Mobile App - 200,000 downloads, 4.4 rating
The History and Team of WazirX
The exchange itself is owned by Zanamai Labs Pvt Ltd and was launched in 2017. It was founded by Nischal Shetty, Sameer Mhatre, and Siddharth Menon.
Shetty is actually a Forbes 30 under 30 most influential entrepreneurs in the world. He was the founder of Crowdfire marketing bot, a platform that helps bloggers and content creators to grow their audience. He earned a B.E. in Computer Science at Visvesvaraya Technological University.
Mhatre a full stack developer and designer who oversees all the tech side of WazirX. He earned his Computers Bachelor’s degree at Bharati Vidyapeeth College of Engg and earned a Post Grad Diploma in Computer Science at CDAC. Along with founding WazirX he has also co-founded Crowdfire, worked as a software developer for Infomedia18, and at Myzus Infotech.
Menon is the innovator of the first automatic order matching P2P exchange over at WazirX and acts as the head of products. He considers himself an expert in consumer social and fintech with over 15 years of experience in product development and growth. Along with co-founding WazirX and Crowdfire, he has also co-founded other companies such as 3CRUMBS, a mobile startup to find local buys, and Borget Solutions, a SAAS to help non-scheduled airlines with daily operations.
India Crypto Ban Renaissance
Let us begin with the controversial cryptocurrency ban.
WazirX was in a period of uncertainty when the Reserve Bank of India (RBI) announced that it would stop dealing with all crypto-related accounts in April 2018. This caused a huge uproar within the blockchain community in India as it forced many cryptocurrency-related businesses to close at the time.
The RBI criticized Bitcoin and other cryptocurrencies for having a lack of intrinsic value earlier during 2018 which caused a flurry of large Indian banks to close the functionality of crypto exchange accounts under the regulatory pressure.
The uncertainty regarding the effective cryptocurrency ban had caused WazirX to go on the offensive and change how they conducted their practice. As a result of this, they decided to open their P2P exchange (discussed below) which allowed users to flow in and out of cryptocurrency with the use of USDT.
Luckily, the new P2P exchange helped WazirX to survive through the cryptocurrency ban that was overturned two years later in March 2020. It actually took the power of India’s Supreme Court (the highest court in the land) to overturn the ban and force banks to handle cryptocurrency transactions from traders and exchanges.
WazirX P2P allows users to buy and sell USDT for Fiat directly in a peer to peer fashion.
WazirX P2P was launched on July 10th, 2018, and was introduced as a counteractive measure to the enforced cryptocurrency ban in India. It allowed users to cash into crypto on the platform by buying USDt directly with sellers of the stablecoin in fiat. It also allowed users to cash out in the reverse direction.
Users can cash out by selling crypto for USDt and then selling this USDt on the P2P exchange
The great thing about the platform is that it automatically matches the buyers and sellers through their proprietary matching engine and holds the funds in escrow to ensure security for both parties.
Furthermore, security is enforced through typical KYC methods and the exchange also keeps a record of every transaction conducted.
If there is a problem with any particular trade there is a Dispute Resolution system to handle this. The team has a multi check fool-proof process that ensures accuracy when reviewing disputes and tends to them quickly.
The team recently introduced a new system to the P2P matching that reduces the confirmation time for the trade by 75%. The feature involves a 15 minute period for buyers on the platform to accept the trade and see the sellers’ payment details. This reduces the time for the USDT to be locked in escrow for the sellers.
WazirX P2P became a huge success in India and the team has plans to expand this on a global scale with the help of Binance.
Smart Token Fund
The WazirX Smart Token Fund (STF) platform was launched in September 2019. STF is a platform that allows investors to connect with skilled traders to grow each other’s portfolios in a simple, secure, and transparent manner.
The platform involves Smart Tokens and 2 separate entities; STF Investors and STF Traders.
STF Investors are investors that don’t have the time or skills required to manage their crypto portfolio. These investors buy a Smart Token in order to pass their portfolio to an STF Trader & let them manage it
STF Traders are traders who get to create their own Smart Token Fund and let investors buy into it. When a Smart Token is bought, the skilled trader will then manage their portfolio to make a profit. As they profit, the price of their Smart Token increases in value. The traders can then go on to sell the Smart Token to secure their own individual profits.
The important thing to remember here is that the STF Trader is only able to trade with the STF Investors portfolio and never has the option to withdraw any of the cryptocurrency, making it safe for investors.
In November 2019, WazirX was acquired by Binance, the world’s leading cryptocurrency exchange. With this new partnership, users are be able to use Indian Rupees (INR) to buy and sell cryptocurrency via Binance Fiat Gateway.
Circulating rumors estimate that the deal was between $5 to $10 million for the acquisition, however, this can not be confirmed.
WazirX P2P engine will be integrated into the Binance Fiat Gateway platform to allow users to trade any digital asset on Binance with the purchase of USDT in different countries that experience a similar cryptocurrency ban.
Changpeng Zhao, the CEO of Binance, had the following to say about the takeover;
"The young demographic in India give an edge to adopt and build on new financial technologies, and I believe this will play a vital role in making India a global blockchain innovation center to also spur cryptocurrency adoption throughout the larger public in the country."
After being acquired by Binance, WazirX went on to release their own token on the Binance Launchpad platform. WRX is designed to be the utility token to form the backbone of the entire WazirX ecosystem.
It is built on the Binance chain and is expected to feature use cases such as trading fee discounts, WRX Trade Mining, paying for margin fees, and much more.
There is a 1 billion max supply in circulation and all of them were sold to Launchpad participants who drew winning lottery tickets to buy the tokens.
Blockchain For India
Binance and WazirX announced a blockchain fund aimed to sustain blockchain development in India during March 2020. The $50 million fund, backed by BNB, BUSD, and WRX) is focused on the promotion of blockchain adoption in the country.
This is a great opportunity for India when we consider that the country has a great wealth of talent that will help to fuel the growth of many different Indian blockchain startups. Investments will range from $100,000 to $5 million and will include fiat-to-digital asset gateway solutions, trading platforms, remittance solutions, digital asset wallets, DeFi platforms, and dApps.
WazirX is a very strong cryptocurrency exchange platform that has gained a very favorable reputation and trust within its own community. We can continue to expect the exchange to serve their country with their best interest at heart when we consider their track record in fighting the cryptocurrency ban in India.
Furthermore, with the powerful Binance behind them, we can expect WazirX to flourish along with the WRX token itself.