VELICFinancial Coin VELT

One of VELIC’s flagship product is the cryptocurrency exchange, which aims to provide a safe and transparent trading environment. Today, we can notice two main types of crypto exchange platforms — fiat crypto exchanges and pure cryptocurrency exchanges. Which category does VELIC belong to? We’ll figure this out after reviewing the main principles behind each type.

Fiat Exchanges

Fiat cryptocurrency exchanges allow traders to buy cryptocurrencies with fiat money, whether it’s the US dollar, European euro, the UK pound, Korean Won or Japanese Yen. This option enables some fiat crypto exchanges to provide additional payment and deposit options, like a credit card, bank wire transfer, and cash.

One of the most popular exchanges falling under this category is Coinbase, the largest crypto platform operator in the US. Other relevant examples are Bitfinex, Kraken, and Gemini.

Pure Exchanges

Pure crypto exchanges, also called altcoin exchanges, don’t provide trading pairs that involve fiat currencies. As a consequence, they don’t handle traditional payment methods, whether it’s wire transfer or credit card. Instead, traders can buy tokens in exchange for a base cryptocurrency, like Bitcoin, Ethereum, a stablecoin of some kind or a proprietary token developed specifically for the platform use. In other words, you have to make your first deposit in cryptocurrency rather than fiat.

The most popular exchange platform of this kind is China-based Binance. Most of the crypto investors there buy tokens against Bitcoin or USDT. Thus, you’ll see crypto pairs like ETH/BTC, LTC/BTC, LTC/USDT, XRP/USDT, and so on.

When asked about how was the progress of developing a fiat crypto exchange, Binance CEO Changpeng Zhao reportedly said:

“Fiat exchanges do take longer to set up because we actually don’t control some of the parts, especially regarding bank accounts, fiat gateways, etc. So, it’s a little bit tricky. It’s a lot more tricky than pure crypto because, with pure crypto, we control everything; the blockchain does not reject us… Things are coming along quite well.”

What Type of Exchange Does VELIC Provide?

Initially, VELIC users will be able to buy cryptocurrencies against five base coins, including Bitcoin, Ether, USDT, ICX, and VELT, the latter being the proprietary token. Thus, VELIC is a pure cryptocurrency exchange given that it allows crypto-to-crypto trades.

The goal of VELIC is to allow traders to focus on the process rather than being bothered with so many inconveniences that are typical for most of the crypto exchanges today. VELIC’s exchange infrastructure also integrates an over-the-counter (OTC) platform for institutional investor and the Initial Auction Offer (IAO) platform, which supports blockchain projects issuing tokens for the first time.

Does Being a Pure Exchange Limit Potential?

You might wonder whether VELIC made the right step when it chose to develop a crypto-to-crypto exchange instead of building the infrastructure for fiat currencies as well. However, operating a pure exchange doesn’t imply any limitation. On the contrary, a study carried out by CryptoCompare in 2018 showed that pure crypto exchanges had dominated the market, with an average daily volume of $4.7 billion in October 2018, compared to $2 billion daily trading volume recorded by fiat exchange during the same period.

Thus, the fact that VELIC is a pure crypto exchange doesn’t affect its potential at all. Users will be able to trade cryptocurrencies in a secure environment.