Two exchanges, Poloniex and KuCoin, thatare known to be rivals on the market have taken a decision to become partners. They intend to co-invest in researching and to explore new industry opportunities together.
Two of the industry’s best known exchanges have revealed they’ve entered into a partnership. Poloniex and KuCoin, once rivals for market share, are now partners intent on exploring synergies to grow their business and bolster innovation. While each platform will continue to plow its own furrow, opportunities for collaboration will be explored.
Although exchange partnerships aren’t uncommon, they usually involve a major exchange taking a regional or specialist platform under its wing. It’s rare for two platforms that are ostensibly in competition with one another to partner. There would appear to be tangible benefits that each party can derive from this alliance, however, given that Poloniex is established in the US and Europe, but has a low profile in Asia, while the reverse is true of KuCoin.
What a Strategic Partnership Means
“We are very excited to be able to reach a strategic partnership with KuCoin,” said VP of Global Business and Marketing at Poloniex, Shelley Wu. “For a long time, the digital-asset exchange industry has been in a state of internal attrition and competition, but this is not healthy for the industry. The strategic cooperation between Poloniex and KuCoin shows that there is not only competition in the industry, but also the possibility of mutually beneficial cooperation and collaboration.”
A strategic partnership generally means that the entities in question believe there are benefits to working together, even if they haven’t quite worked out what they are yet. Billing it as such gives them leeway to increase or decrease the level of mutual cooperation as events necessitate. That said, the two exchanges have identified areas where they envisage working together: they intend to co-invest in researching derivatives and matching engine technology, and set up a joint research institute to explore new industry opportunities.
Adapting to a Rapidly Changing Industry
The KuCoin and Poloniex partnership can be taken as evidence of an exchange landscape that is evolving fast. DEXs such as Uniswap have been this year’s big success story, having for so long lagged behind the more liquid and faster speed CEXs. In addition, new derivatives platforms, options contracts, trading tournaments, and liquidity provision mechanisms have presented opportunities for bold exchanges to enter. What’s become clear this year is that crypto companies that stand still risk becoming obsolete. Innovate or die is the mantra, one which KuCoin and Poloniex have acknowledged.
“Decentralized digital assets that are neither endorsed nor supported by sovereign credit are rapidly becoming one of the world’s most popular quality investing targets,” noted KuCoin CEO Johnny Lyu. “In other words, the market demand for digital assets is growing rapidly to address this desire, and becoming an indispensable factor in the new global economy … I believe, when we look back in five years, the strategic partnership between KuCoin and Poloniex will be viewed as a remarkable milestone of the digital assets industry.”
Time will tell whether Lyu’s prediction comes to pass. In the here and now, KuCoin and Poloniex have shown that competition doesn’t have to come at the expense of collaboration. It’s a story that runs right through crypto.
Having deep expertise in intercultural communications, Natallia is fond of foreign languages and cultures. She strongly believes that people should continually develop to stay on track, that’s why she permanently widens her knowledge in various spheres. Currently, Natallia is fully immersed in crypto, blockchain and financial techs.