FTX lost nearly all of its customers funds. At Outlet, we're designing an exchange where this could never happen.
The past several days in crypto have been devastating for our entire industry. While we haven't been affected by any of the events at FTX or the fallout, this is a big stain on crypto, and will unfortunately color public perception of DeFi well into the future.
Events like this should never happen. Exchanges are meant to take customer deposits and safeguard them, and while exact details have yet to fully emerge, it's clear that FTX completely abdicated its responsibilities. Mismanaging funds in such a manner is not just a mistake, it's criminal, and we hope that all responsible parties are held accountable.
This unfortunate event has highlighted a big problem in crypto that Outlet is aiming to solve: centralized exchange risk.
When you purchase crypto through a centralized exchange like FTX, you don't truly have control over your funds; the exchange does. This means users must trust the exchange to safeguard their assets, not get hacked, and obviously not to engage in outright fraud. Unfortunately, FTX betrayed that trust. This disaster could not have exemplified the risk of storing funds on a centralized exchange any more clearly.
At Outlet, we believe the best answer to this problem - for most people - is direct-to-private-wallet exchanges and onramps like the one we are about to launch. By purchasing crypto through an exchange that sends your tokens to your private wallet, users are not exposed to centralized exchange risk, and events like the one that just unfolded are impossible. When you hold your assets in private wallets, no one ever has control over them except you.
While the past few days in this market have been tough, we're excited about building a product designed to solve this problem. We're more optimistic than ever about the future of this space, and we're proud of our role in bringing a better exchange experience to our users.
Our hearts go out to anyone who has been affected by FTX's negligence, and we hope to welcome with open arms future crypto traders