On August 23, BKEX announced the launch of Dragon Plan, a new $20 million incubator fund for crypto projects and recruitment model for node operators. This is part of the exchange’s mission to add more transparency to the crypto trading market by eliminating issues of market manipulation caused by fake data and unanticipated whale trades.
Centralized Exchanges and Fake Data
One of the biggest complaints that many crypto traders have today is the ever-present possibility of fake trade volumes on exchanges as well as transparency of projects (i.e. Tether scandal).
Before this year, there was some controversy surrounding how high-volume exchanges falsely reported back-end transactional data. Earlier in 2019, several research reports were released that confirmed the prevalence of such activity. The exact percentage of fake trade volume is unknown but is quite high. For example, one analysis of 48 cryptocurrency exchanges from November 2018 to April 2019 showed around 86% fake volume. Another study, conducted around the same time, reported 95%.
This has meant that traders have lost confidence in some centralized crypto exchanges. Decentralized exchanges mostly solve the transparency issue of trading data; however, their ability to handle frequent trades is limited by scalability issues of the blockchains they utilize.
Sunshine Trading In Crypto
BKEX aims to provide a more transparent way of trading on its centralized exchange. By ensuring that trade data can’t be falsified, it is working to solve the trust issues that exist in the crypto trading market. BKEX is also the world’s first sunshine trading platform. A sunshine trade occurs when a high-volume transaction is revealed via a public announcement before the order is entered. By making the data related to large trades available to everyone, sunshine trading aims to minimize the possibilities of price manipulation caused by crypto whales. This helps to make the playing field more level for all traders.
Photo from BKEX night/ Dragon Plan Launch Ceremony on August 23 in Shenzhen, China
What Is Dragon Plan?
Dragon Plan is an initiative launched by BKEX to encourage sunshine trading on its exchange. The plan features two core components. First, the exchange will launch a $20 million incubator “Sunshine Fund”. The purpose of the fund is to ensure that sunshine trading isn’t a hollow slogan. By offering a tangible incentive to cryptocurrency projects, BKEX hopes to be in a better position to ensure that its mission to add more transparency to crypto is matched by blockchain projects. The goal of this fund is to find and support the next unicorn project. The second component of Dragon Plan is to recruit 35 node operators (30 business nodes and 5 city nodes) that align with the BKEX mission to end market manipulation in crypto trading.
BKEX CEO Jiaming Ji commented on Dragon Plan,
“I hope that more high-quality institutions, high-quality projects, multiple media, and capital can cooperate with BKEX to promote the reform of exchanges.”
As of September 3, 2019, BKEX has 140 trading pairs and 74 coins listed. On CoinMarketCap, it is consistently ranked as a top exchange by 24-hour adjusted trade volume. Similar to other top exchanges like Binance and Huobi, BKEX has its own BKEX Token (BKK) for on-platform trading.