In issue #50 we
commented on Coinbase acquisition of Paradex and alluded at an upcoming Q&A with its CEO
Ron Bernstein. It took a couple of weeks to let the dust settle and the team decompress, but we finally managed to arrange it. So here you go!
TE:
You only started working on Paradex 9 months ago. What's been the main driver of your decision to exit now vs continue on the journey independently?
RB: Over the past six months, we've seen an explosion of potential business opportunities Paradex could explore, like NFTs for example. After our first conversations with Coinbase, it was apparent that they had an amazing bird's-eye view of the space and a very strong, mission-oriented drive to pursue those opportunities. We had a choice to explore those independently, or explore them mutually with the resources and brain trust they've built. It was an easy decision to make.
TE: How does Paradex fit within Coinbase's corporate strategy and portfolio of products?
RB: Paradex signifies Coinbase's seriousness in building an
open financial system for the world, and shows their commitment to non-custodial, user-controlled products and decentralized protocols— things complementary to their core business. In terms of where we fit in the overall suite of products, Coinbase has been extremely respectful in giving us both leeway and runway to find our own footing. So, we're focused less on interoperability and synthesis, and are just concerning ourselves with building the best relayer for our users. Opportunities for overlap and cross-pollination will come with time and adoption.
TE: Binance is now building a DEX, Coinbase acquired one. Is there a future for 'pure-play' DEXs and, if so, what would that look like and what do you think will cause the inflection in adoption?
RB: I really can't say if the DEX and relayer space will be driven by small, niche teams hyper-focused in their specific protocols and competencies, or if larger, multifaceted blockchain companies will pursue those competencies in-house. I do think the inflection point comes naturally with further crypto adoption, and not necessarily related to asset price either. Where that tipping point is is unclear. But it all feels very early to me, and the momentum is extremely encouraging.
TE: You have taken a pragmatic approach to designing Paradex using the 0x protocol, for example removing the need for the ZRX token. Are you going to continue building on Paradex from the existing architectural foundations or start from first principle inside Coinbase?
RB: We'll continue to evolve Paradex to satisfy users. That means removing friction wherever possible. That's also consistent with Coinbase first principles: empowering users in a truly open financial system with the easiest to use set of tools.
TE: If you'll continue building on 0x, is it rational to expect Coinbase to become a big holder of ZRX in order to influence its governance?
RB: It will be interesting to see how V2 of the protocol gets integrated into the ecosystem in July and how a framework for future governance will start to form. The 0x team is incredibly thoughtful, and they ship solid software. I expect their approach to governance to be very well thought out too.
TE: Continuing on 0x, should we expect congestions in the Ethereum network's as Coinbase starts funnelling its user base and liquidity to Paradex?
RB: I'd consider that kind of a good problem, and also everyone's problem. If this turns out to be true, it validates the desire for more user-control of assets, and it'd be in everyone's interest to allocate time and resources to scaling so that congestion would be less of an issue.
TE: Presumably there will be regulatory implications, the press release states that the service will open up "eventually to U.S. customers after we implement changes." Can you give us some more colour on that and your views on how you think the regulatory environment will evolve in the US?
RB: It's no secret that regulators are actively trying to figure out what to do with crypto. Fortunately, a big part of the Coinbase brand is regulatory respect and a willingness to take in active role in helping inform the regulatory environment in which it operates. The different agencies are highly engaged and appear very mindful about not stifling innovation. Clarity will come with time.
TE: Thanks for your time and insights Ron, and best of luck in your new role!
