AAX, one of the most popular crypto platforms has seen many new developments. Recently, the platform announced its integration with the Bitcoin Lightning Network, which was soon followed by another update regarding its support for TARO — a protocol that enables asset issuance on the Bitcoin network. We were curious and asked Ben Caselin (head of strategy research at AAX) some questions.
And, here’s how our short interview went.
Q: We’ve been following many changes at AAX. The most recent one is the integration of Lightning Network. Please tell us more about AAX before we get into the details.
A:AAX was launched in November 2019, with a strong focus on institution standards. It currently ranks among the top exchanges within the Asia-Pacific region, and has been expanding quickly to other continents. Our platform is powered by LSEG Technology – the same technology that powers London Stock Exchange, Borsa Italiana, and Oslo Stock Exchange.
AAX is committed to accelerating adoption of Bitcoins and other digital assets. Our platform is capable of processing most orders within 800 microseconds. It also supports a variety of DeFi and crypto-centric products. We plan to expand our efforts in emerging markets like Brazil, Nigeria, and Turkey by 2022 to make crypto more accessible to everyone.
Q: How does AAX differ from other crypto-exchange platforms?
A:AAX has the lowest market prices and higher savings rates than any other brokerage. We are known for our prompt customer service, which we offer 24×7 across multiple languages. AAX was the first to adopt the Satoshi standards. This was followed by the launch of the SATS spot market, which has zero trading fees.
Q: Let us know more about Lightning Network integration. We are interested in how this will benefit users.
A:Lightning Network, a second layer solution to Bitcoin, is seeing rapid adoption in emerging markets. The Lightning Network allows you to transact in bitcoin almost instantly and at a very low cost. Lightning’s support allows users who have bitcoin stored in Lightning to use AAX as a deposit method. This makes it easier to withdraw your bitcoin and allows you to make smaller transactions. It also works with our SATS spot markets.
AAX integrates the Lightning Network to allow small trader/holders to reap the rewards of low fees and lower limits. This integration allows you to arbitrage between Lightning-integrated Exchanges. AAX is connected into a fast growing bitcoin payment network, which the likes Twitter also integrate. This will allow AAX to lower participation barriers, thereby accelerating cryptocurrency adoption.
Q: Are there any changes that you anticipate in the user experience and behavior of AAX as a result of the Lightning Network integration
A:Members of the bitcoin community are looking for an exchange that supports this fast, cheap method of funding. It is expected that we will have easier integration in Latin America as the Lightning Network is gaining popularity. The integration opens the doors to new partnerships and innovation in Lightning-based yield products.
Q: Are there any migration steps or actions that users must take to get the most out of Lightning Network?
A:Lightning withdrawals will not be available to users who use Lightning apps or are withdrawing from an exchange that supports Lightning Network. Lightning Invoices can also be paid with bitcoin funds via AAX.
Q: Are you positive that people will still be willing to use BTC via the Lightning Network in this time of uncertainty on markets?
A: Bitcoin is a volatile asset, and as a means for day-to-day payments, it’s probably too volatile for many people. There are many teams that work to bring additional capabilities and features to the technology. One that we’re excited about is TARO, a project that wants to add generalized smart contracts and tokens to Bitcoin, using the same basic technology as the Lightning Network.
One of its greatest selling points is, of course, the ability to transact using stablecoins. Lightning settlements are instant and cost-effective, while BTC prices fluctuate.
Q: What opportunities are there with TARO? How is it different to other first- and second-layer chain alternatives like Polygon or Ethereum?
A:Taro does not allow smart contracts or asset transfers to be executed on the blockchain. They are enforced only by the blockchain. Transfers are made by the sender (who must make the corresponding bitcoin transaction) and then enforced by their recipient. This is the same process as with the Lightning Network. The Bitcoin network of course holds the “checkpoint” data to make sure that if somebody cheats, the transaction sequence can be reverted to the last shared point.
Q: Is TARO going to be integrated into AAX?
A: It’s still too early to say as the project is in testnet, and the TARO team right now is not committing to any mainnet launch dates. We can expect the project to be online soon after it is developed. AAX will of course integrate it as quickly as possible once it’s live and has seen some real-world testing.
Q: Could you please tell us about Satoshi (SATs Standard) and why it was adopted?
A:The price unit bias gives people new to Bitcoin the perception that it is costly while the meme coins are inexpensive. This is a misconception – adopting a SATS standard counters the price unit bias. The smallest unit of bitcoin measurement, for example, is the Satoshi (SATS), which has a value equivalent to 10.00000001 BTC.
Not only is SATS the answer to the users’ perceived problems of bitcoin unaffordability and inaccessibility, but it also is expressive of a long-term vision and bullish expectation around the long-term growth of bitcoin. SATS can be used as a practical currency because there is only 21,000,000 bitcoins.
Q: Is there any confusion for new users who have been using the SATs standards but are now used to BTC conversion?
A: Whenever a new concept is introduced, people need time to get acquainted with it – that’s basic human nature. That said, SATS is well-known in the crypto space, and as people “stack SATS” and participate in the conversation, it’s pretty easy to switch between denominations. SATS are easily understood by people who understand cents. SATS are actually easier to comprehend and more straightforward to calculate. They will be able facilitate micropayments on AAX and the payment of transaction fees.
Q: Are there any other changes for the AAX?
A:In 2021, retail trading volumes increased significantly as thousands of users were added. As we continue to grow our user base and expand into emerging markets, we hope to sustain the momentum for 2022. AAX will be focusing on product localization to better match crypto’s benefits with communities’ needs. We will also focus more on crypto projects designed to drive impact, especially around important humanitarian goals – this is how we intend to build community, advocate for the space, and work to make crypto a force of good.