All about Bullish, the Block.one-backed cryptocurrency exchange that has announced to go public on the NYSE with well-known investors and experts' support.
Bullish, a hybrid crypto exchange
, expected to launch sometime in 2021
, has been making waves not only in the crypto world but also in the traditional market. Even though the exchange is yet to deliver a live product, it has announced
plans to go public on the New York Stock Exchange with a debut valuation of $9 billion
, which is 10% of what Coinbase valuation was when it debuted on Nasdaq.
In this guide, we will explore the features of this exchange and why it is believed to be a potential unicorn company.
On May 11, 2021, Block.one — the company that developed the EOS.IO protocol — announced plans
to launch a hybrid exchange called Bullish.
The company describes the exchange as a platform that effectively combines decentralized and centralized trading infrastructures for improved performance
. The goal is to develop a hybrid system
where both automated market making
and traditional order book
mechanisms can thrive. The leader of this project believes that this approach will fortify Bullish against the limitations of both centralized and decentralized exchanges
In summary, Bullish looks to provide high and predictable liquidity, a compliant trading infrastructure, and blockchain-enabled transparency.
Although this is not the first time exchange is attempting to enable a hybrid crypto trading platform
, what makes Bullish stand out is the level of hype surrounding its introduction.
For instance, prior to Block.one’s announcement in May, there were no real indications that Block.one was planning to develop an exchange that would rely on an EOS-IO-based blockchain
software for transparency and audit-ability. And yet, the company revealed that the project had already secured $10 billion worth of funding and onboarded prominent investors.
According to the information contained in the press release, the initial fund was raised from Block.one’s capital injection of 164,000 BTC, 20 million EOS, and $100 million. An additional $300 million was raised from a private funding round involving prominent investors, including Peter Thiel’s Thiel Capital and Founders Fund, Richard Li, Christian Angermayer, Alan Howard, Louis Bacon, Galaxy Digital, and global investment bank, Nomura.
Less than a month later, reports surfaced that Bullish had put plans in motion to go public via a merger with a special purpose acquisition company (SPAC), Far Peak Acquisition, headed by Thomas Farley, a former president of the New York Stock Exchange. As part of the deal, Farley would emerge as the CEO of Bullish, while the CEO of Block.one, Brendan Blumer, would serve as the company’s chairman. In essence, Bullish had moved from being a non-entity to becoming one of the most valuable crypto exchanges in under a month.
Interestingly, SB Northstar, the investment arm of SoftBank, joined
the already long list of Bullish’s investors when it invested $75 million in July 2021
. By the end of July, the exchange had launched a private pilot program
to test its services. Bullish explained that participants would access some of the features of the exchange with simulated crypto assets and paper money. This program is slated to run between July 27, 2021, to September 13, 2021.
Below are some of the features that Bullish plans to implement:
Hybrid Order Book:
As discussed earlier, Bullish plans to combine elements of an automated market maker
with the strengths of a central exchange to create a proprietary hybrid order book with deep liquidity capability. In other words, the exchange features liquidity pools
, as well as an order book such that it can meet up the liquidity demands of institutional traders.
Lending Tool: When Bullish launches, it will allow users to lend funds out to margin traders.
Portfolio Management Tool:
The exchange provides an interface where users can monitor their portfolio
, including the performance of their trades, assets deposited in liquidity pools, and those made available for margin traders.
Sophisticated Security Infrastructure:
Bullish integrates cryptography
-powered security safeguards. All transactions executed on Bullish are recorded on the EOS public blockchain. Therefore, the entire system will be verifiable. Also, it will support WebAuthn protocols for password-free authentication.
Yield Earning Service
Since Bullish incorporates the concept of liquidity pools, it had to enable a reward mechanism that will incentivize users to deposit funds that other users can trade against. Therefore, users would generate earnings when they make funds available for margin traders.
Compliant Trading Infrastructure
One thing that Bullish is betting on is its ability to provide fully compliant exchange services that would potentially appeal to institutional traders. According to one of its documents
, Bullish claims that it plans to be fully regulated and licensed in Gibraltar.
However, there is no saying how its proposed public listing would alter these plans, considering that it may have to operate under the purview of regulators in the United States.
The exchange has opted for a hybrid system in order to guarantee speed and liquidity. For Bullish, speed and liquidity are non-negotiable.
Skeptics have questioned the hurried pace at which this project is unraveling. As mentioned earlier, the exchange had announced its intent to go public even before it launched a live version of its product. However, when dissecting this particular argument, it is vital to consider that respected investors and individuals, like Peter Thiel and Thomas Farley, have invested their financial resources and expertise in this project. Therefore, there are reasons to believe that Bullish is proposing an appealing value proposition.
Another talking point is Block.one’s track record
. The company raised over $4 billion during the Initial Coin Offering (ICO) of EOS in 2017.
During this fundraising campaign, the EOS blockchain was marketed as a potential Ethereum killer. However, four years down the line, EOS has still not lived up to the billing. So, when we take into account the track record of EOS and Block.one, doubt may begin to creep in.
Bullish’s decision to combine DEX implementation and conventional trading mechanisms is potent enough to bring about success. However, it remains to be seen if it delivers on this promise.
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