IDEX Raises $2.5M to Rebuild Hybrid Exchange for Algorithmic Traders

The seed investment will be used to re-launch the Ethereum-based exchange so algorithmic traders can better use the platform.

Aug 6, 2020 at 1:00 p.m. UTC
Updated Sep 14, 2021 at 9:40 a.m. UTC

IDEX has raised $2.5 million to relaunch as a trading platform accessible to market makers and algorithmic traders.

  • The Ethereum-based hybrid exchange said Thursday the $2.5 million would go to launching IDEX 2.0, a new, more liquid platform.
  • The money came in a seed round led by G1 Ventures and Borderless Capital, with other commits from Collider Ventures and Gnosis.
  • IDEX's creator, Panama-based Aurora Labs, raised $6 million in an initial coin offering (ICO) in early 2018.
  • Market makers and algorithmic traders (a prominent subset being high-frequency traders, or HFTs) will be able use the new exchange. They have previously been shut out because of high transaction costs.
  • In a statement, the exchange said this new group of traders will tighten spreads, making IDEX cheaper and more seamless for its users.
  • HFTs use powerful computers to process thousands of transactions in fractions of a second, earning revenue from exploiting minuscule disparities in listed prices. They are controversial: some allege they manipulate markets, but advocates say they improve liquidity and market performance.
  • IDEX is a hybrid exchange in that settlement and storage are decentralized, while trade executions and deposits are processed centrally. This makes it fast enough to be usable while offering the security of a fully decentralized exchange.
  • The hybrid aspect of IDEX's design will remain unchanged with the IDEX 2.0 launch, expected in the next few weeks.

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