Ethfinex is a new cryptocurrency trading platform that serves as a decentralized hybrid exchange. Ethfinex centers on tokens and assets related to the Ethereum network and strives to be a hub for the Ethereum community and give access to an assortment of ERC-20 tokens. The exchange also serves both intermediate and advanced traders and has similar visions as its sister site, Bitfinex. Ethfinex gives a broad selection of trading options and intends to be the preferred choice of Ethereum token traders all over the world.
As it has been made evident by its name, Ethfinex is related to Bitfinex and belongs to a company that owns the renowned crypto-exchange. Bitfinex’s mother company is also involved in managing the Ethfinex and Tether platforms.
Bitfinex is headquartered in Hong Kong and managed by iFinex Inc. while Ethfinex Inc. is registered offshore on the British Virgin Islands and operates under the administrative laws of the British Virgin Islands, according to its terms of service.
Trading on the platform was launched and made accessible for all existing Bitfinex users on Dec. 29, 2017, and new users were allowed to join starting from Jan. 15, 2018. Like Bitfinex, Ethfinex is not available to the citizens of the United States, and while it is open for live trading, the platform is still in its Beta (developmental) stage with many of its peculiarities set to be revealed later this year. Besides allowing the trading of tokens compatible to ERC-20 and participation in crowd sales, Ethfinex also provides a peer-to-peer funding market, margin trading options, and a community discussion forum.
Despite allowing new signups only recently, Ethfinex is currently pulling a 24 trading volume over $280m, this figure is eclipsed by its ETH/USD pairing which presently generates more than $200m a day. Over the last 30 days, the platform has facilitated the trade of over 8,879,121.87 ETH.
Like Bitfinex, new users are welcomed with a reminder that the exchange’s service comes with some specifications and is directed at professional traders. The terms and conditions currently involve agreeing to minimum account equity of 10,000 USD as new accounts cannot trade or perform any functions on the platform until this amount is reached. Moreover, to gain access to fiat deposits and withdrawals, clients must accept to undergo a verification process that usually takes up to 6-8 weeks to complete.
Once you have agreed to all the terms and conditions, you can go ahead and create your account. You will be required to enter a valid email address, create a username and password. You will also be required to enter a unique captcha text and give your time zone.
Clients with existing Bitfinex accounts are also given a choice to connect their accounts. By demanding this feature, clients will get an email that lets them sign into their Bitfinex account and connect it to their Ethfinex profile.
Ethfinex’s trading platform is designed for both novice and experienced traders, and it allows a variety of trading options. Therefore, the following types of orders are also available: Market, Limit, Stop, Trailing stop, Fill or kill, One cancels other (OCO), Post-only limit order, Hidden order, and Algorithmic Orders.
The fact that Ethfinex functions as a decentralized hybrid exchange gives traders access to a high volume of trades and highly liquid digital assets, with bid/ask, and order counts determined in real time. This allows traders to flexibly choose when placing an order, unlike most decentralized exchanges.
The platform lets users trade with up to 3.3x leverage by getting funding from the peer-to-peer margin funding market. Traders can choose to borrow the desired amount of funding at a rate and duration of their choice, and they can also decide to open a position and have Ethfinex take out funding for them at the best price available.
Ethfinex explained trading volume determines their fee structure and fees for order executions and maker or taker status. You pay maker fees when you add liquidity to the order book by setting a limit order below the ticker price when purchasing and above the ticker price when selling. You pay Taker fees when you do the opposite and remove liquidity from the order book by filling an order that is already in the order book.
Maker fees range from 0.1% to 0.0% while the taker fees range from 0.2% to 0.1%.
Deposits and Withdrawals
Large cryptocurrency deposits on Ethfinex are free of charge. However, deposits less than a 1000 USD incur a Small Deposit Fee. From Ethfinex’s point of view, small deposits produce an excess of wallet inputs and put pressure on the Ethereum network and its Ethereum nodes. Therefore, the exchange prefers clients avoid sending small deposit amounts and advise their clients to batch smaller amounts together into more substantial deposits.
Withdrawals fees differ, depending on the particular cryptocurrency you would like to withdraw.
Is Ethfinex Safe?
The security protocols Ethfinex utilizes are similar to those used by Bitfinex as their sister exchange has encountered some well-documented security attacks. The necessary ground is to use offline storage, and the majority of system funds are stored in ‘cold’ wallets offline. About 0.5% of digital assets can be accessed through ‘hot’ wallets.
User accounts are secured through:
- Two-factor authentication (2FA)
- Advanced verification tools to monitor suspicious behavior and the integrity of your account
- Withdrawal Protection
- Advanced API key permissions
- Email Encryption with OpenPGP
What distinguishes Ethfinex from traditional exchanges is its utilization of a hybrid method of decentralization. By using decentralized exchange protocols, trades are executed by smart contracts on the Ethereum blockchain through the 0x protocol. In the future, this will develop further to allow any other decentralized exchange protocol to connect with Ethfinex.