- The ShapeShift cryptocurrency exchange platform is abandoning its current business model
- Instead, the company will be providing an interface where users can seamlessly interact with different decentralized protocols
- At launch, the functionality will be limited to ETH and ERC-20 assets
ShapeShift is moving to a new business model as it embraces decentralized trading protocols
The ShapeShift cryptocurrency exchange platform is making a drastic change to its business model – the company’s CEO Erik Voorhees says that ShapeShift will be removing know your customer (KYC) requirements for its users as the platform shifts towards using decentralized technologies.
In other words, ShapeShift will no longer be a counterparty to its users’ trades, but it will instead only be providing an interface through which users can interact with blockchain-based protocols for exchanging different crypto assets.
The United States-based ShapeShift had to implement KYC protocols in 2018 to stay compliant with regulations. Voorhees, an outspoken libertarian, says he was conflicted about the decision:
»And so, for the past two and a half years, we’ve been engaged in a practice that is not only ineffective, but that I and others find plainly unethical and dangerous: the warrantless collection and surveillance of personal, private information of innocent individuals.«
Voorhees explained that while decentralized exchange protocols were not a viable option for ShapeShift two or three years ago, the technology has progressed to a point where the company is comfortable using them. He added:
»The rise of decentralized exchanges in particular this year has been truly inspiring. ShapeShift had been a business competitor to these venues, and yet an ally to their mission, and so instead of resisting such beautiful innovation, we will embrace it to better serve our customers.«
For now, ShapeShift will continue to offer its existing services, but they will be phased out »relatively soon«, Voorhees says.
Initially, the new-look ShapeShift will only support ETH and ERC-20 assets that exist on the Ethereum network. However, Voorhees said that Shapeshift expects to also start supporting Bitcoin and other leading blockchains within the first quarter of the year.
ShapeShift has integrated leading decentralized trading protocols like Uniswap, Balancer, Curve, Bancor, 0x and Kyber Network into its new product.
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