A Spin-Out Bitfinex claims to be preparing the funds for its new decentralized exchange

A Bitfinex spin-out claims to be preparing funds for its new decentralized exchange - bitfinexDeversiFi, a company incubated by Bitfinex, says that its decentralized exchange (DEX) is attracting interest from institutions thanks to a level of privacy that can protect their trading strategies from rivals.

Dozens of funds ready to be loaded onto the new exchange

A spokesman for DeversiFi said the company already had a "significant fund pipeline" interested in integrating with the exchange following the implementation of the new software, DeversiFi 2.0, which was released last week.

Although no particular details were disclosed, the spokesman said: "We have a show of interest from 70 funds and big traders and we have 18 funds ready to be uploaded to DeversiFi 2.0 at launch."

The smallest of these funds has one quotation about $ 1 million in asset under management (AUM), while some of the major customers had AUM for "well tens of millions". A spokesman said that some institutional customers saw DeversiFI 2.0 "as a key bridge for moving from centralized to decentralized commercial space".

Usability and convenience of a decentralized exchange, but less risk for traders

With a London-based team, DeversiFi started out as Ethfinex, an exchange incubated by Bitfinex in 2017. It was launched and renamed in August 2019. It is not a custodian, so it allows users to maintain control of their funds.

Implementation 2.0 is designed to provide users with scalability and privacy. Using the privacy level of zk-STARK, it allows anyone to trade anonymously and also increases the commercial transaction capacity up to 9.000 transactions per second.

DeversiFI says that one of the main problems that traders have with conventional DEX is that most of them are completely public. Third parties can view trading from their computers.

Professional traders fear that such an opening endangers their strategies, as they can be copied or damaged by competitors. Although it describes itself as a DEX, a crucial difference with DeversiFi is that trades are performed off-chain, so that third parties cannot monitor individual users' trading behaviors.

How are the operations performed?

The operations performed are grouped and arranged onchain once an hour, so "operators cannot be copied," said a spokesman. Ross Middleton, CFO of DeversiFi, said that DeversiFi 2.0 offered users the usability and convenience of a centralized exchange - speed, liquidity and low commissions - by removing the risks including account lockout, trade rollback and hacks .

"We see DeversiFi as the first alternative without custody fast enough and scalable compared to centralized exchanges," said Lev Livnev, formal verification researcher at DappHub and partner of Symbolic Capital Partners, who will start using DeversiFi 2.0.

"Knowing that the matching engine can perform a large number of operations, even at peak times, is crucial for professional traders, and will allow DeversiFi to create liquidity and act as a real alternative to larger exchanges," he added.