A quite new company called Arwen delivers the trade protocol that helps to avoid the stealing of users’ coins during the trading on centralized crypto exchanges. The way the Arwen team decided to present the efficiency of their product is quite unusual — they have created an artificial crypto exchange that tries to steal your coins.

Arwen

Traders never know when the exchange platform they use will get hacked, and the users’ coins kept on the exchange’s wallet will go away. The project called Arwen is aimed to provide secure trading on crypto exchanges. Their method is the combination of the on-chain escrow and off-chain swaps. This technology makes the use of wallets on centralized exchanges not necessary. The very keeping of cryptocoins becomes decentralized, and the Arwen users can opt to choose any wallet they like, and Arwen will provide the way to use it while trading on the exchange.

Mt. Fox.

Arwen announced a demonstration called “Mt. Fox” on March 3. This demonstration is aimed to let the community test what is like to protect yourself from a robbery attempt with Arwen. The project created a fake malicious exchange platform ironically named Mt. Fox that is designed to try to scam the users. The use of Arwen gives an opportunity to save the coins and avoid the loss. Of course for demonstration Mt. Fox uses testnet, so users can feel OK with intentional compromising their coins to the nasty Mt. Fox exchange. The video shows vividly how do Arwen works.

Escrows on Arwen

As you can see in the video malicious activity is doomed because Arwen allows creating an escrow between the user and the crypto exchange. The trade is operated via the escrow that has an expiration date. The proceeds can be used for the next escrows. If something goes wrong the coins get frozen for a while. Allegedly there’s no chance that the coins will end up being stolen.

Arwen CEO Sharon Goldberg says that one of the goals of the Arwen team during the creation of the Arwen Trading Protocol was to make their technology compatible with as many cryptocurrencies as possible. Bitcoin Cash appeared to be the lowest common denominator in blockchains. This currency has a minor attack vector associated with the transactions signatures. The Arwen team successfully surpassed this obstacle and created their product that is able to handle the problem of transaction malleability attacks.

Centralized Exchanges

Goldberg: “Any exchange that prioritizes user protection is going to attract new users and higher volumes. Arwen is a highly marketable feature for centralized crypto exchanges because it satisfies the growing demand from traders and funds for self-custody. With Arwen, a centralized exchange can offer its users a DEX-like self-custody experience, while still allowing them to enjoy the speed and liquidity of the exchange’s orderbooks.”

Currently, Arwen partners with KuCoin and offers the partnership to other exchanges for free. It’s a nice move. We can agree that if you decided to use a centralized exchange platform non-custodial trading may be what you need, although it is quite obvious that only decentralized exchanges can provide the maximum security. Unfortunately, the decentralized exchanges are yet to be well developed nowadays, but it’s just a question of time. Decentralized currencies should be traded on decentralized platforms. That’s understood.