Nearly four months after a hack resulted in losses exceeding $230 million (around Rs. 1,900 crore), WazirX is still focused on restructuring its finances and finalising its operational roadmap. In a virtual town hall held this week, founder Nischal Shetty revealed plans to launch a decentralised exchange (DEX) alongside the existing WazirX platform. Shetty noted that a DEX could reduce risks inherent to centralised exchanges and is aiming to establish India's largest decentralised exchange within the next 12 months.
Centralised exchanges like WazirX serve as asset custodians – retaining the private keys and funds within their systems. Their operations are aligned with government policies that require the collection of KYC details of users and an agreement to monitor user activities and flag suspicious ones. Decentralised exchanges, on the other hand, let users hold responsibility of their funds and private keys via non-custodial services. In addition, DEXes also offer more private transactions compared to their centralised counterparts.
Following the hack on one of WazirX's multi-sig wallet managed by Liminal Custodies, Shetty believes there is a need to launch a new service that provides users with greater control over their funds and private keys.
“Coming to the new business initiative that we are trying to come up with a decentraslied exchange. This will be completely separate, not related to WazirX. People just go back to using centralised exchange because of the ease of use and the convenience. DEXes are seen as only meant for power users, very complicated, only accessible to really technically sophisticated users – otherwise it's not for everybody. So the objective here is, in light of the incident, is to give people an option to experience a safer and far better trading experience,” Shetty said.
Despite a significant hit to its market credibility and reputation, WazirX has already begun initial development of the new platform. However, users have been vocal in their criticism, frequently expressing frustration over the exchange's slow approach to processing reimbursements since the attack.
The new platform will also let users stake their crypto assets to support a blockchain network in return for rewards. The platform will additionally bring Futures Trading and Over-the-Counter desk for fast traders.
Meanwhile, WazirX is working with a legal advisory agency named Kroll in Singapore to restructure its finances and reimburse its users. It has, however, been made clear that the impacted users will only be getting back a certain percentage of their lost funds – not the entire amount. The exchange believes a restructuring plan should be finalised by January 15.
