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One of the best-performing crypto exchanges in India- WazirX, has now announced its plans to come up with a decentralized exchange (DEX) in a bid to improve user security and restore confidence after an almost crippling attack on its system. This was revealed by WazirX’s chief, Nischal Shetty, during a town hall talk recently.
The idea of building a DEX was initiated after the serious security threat that happened in July 2024 when nearly $235 million from the multisig wallet of WazirX was hacked by attackers. These attackers belonged to the same country that has been dubbed the ‘Lazarus group.
Why Decentralized Exchange (DEX) Matters
Such incident raised serious concern on the security issues associated with centralized exchanges compelling WazirX to seek out other decentralized options that would allow users to have better control over their assets. According to Shetty, the DEX will allow users to self-custody their assets, therefore removing the collateral risk associated with centralized platforms.
The soon-to-launch DEX will work in line with WazirX’s existing centralized services. The whole intention is to create a user experience that is the same as the existing traditional exchanges. Shetty said that the purpose of the platform is to make it as easy for the users as possible since most of the users have experienced and complained about the poor experience of decentralized exchanges. The DEX will also launch its utility token, which will be used for transaction fees and ecosystem governance.
Along with launching the DEX, WazirX is rolling out multiple recovery measures for users who were victims of the Wazir X hack. These include:
Recovery Measures for Affected Users
Recovery Tokens: Users will be granted new tokens proportionate to their holdings. These tokens can be either exchanged or utilized in the WazirX environment.
Staking Services: WazirX intends to introduce staking services whereby assets in crypto will be farmed to enable the user to accrue earnings.
Over the Counter (OTC) Desk: This solution will provide an opportunity for institutional and ultra-high net worth individuals to conduct business in large volumes and earn the platform additional revenue.
Futures Trading: Users will be allowed to trade on the futures, which will allow them to make bets on when a cryptocurrency will appreciate or depreciate.
A New Chapter for WazirX and the Crypto Market
As part of its strategy to recover from the ongoing crisis, WazirX intends to restart operations by trading in February 2025. At the moment, the exchange is undergoing a moratorium imposed by a court in Singapore, which helps it reorganize its operations and resolve some of the legal obstacles caused by the hack.
The introduction of a decentralized exchange reflects a huge shift for WazirX as it aims to adapt to the changing trends in crypto by focussing on user control and security. By doing this, WazirX not only aims to restore trust among its users but also tries to stand competitive in the changing crypto market. As Shetty noted, this initiative reflects a commitment to enhancing user security and fostering a more resilient trading environment.
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