The popular privacy coin Monero (XMR) successfully implemented a non-contentious hard fork on August 13 at a block height of 2,688,888, strengthening its security and privacy features even further. With this upgrade, Bulletproofs+ algorithm was introduced, reducing typical transaction sizes by 5%-7% and improving verification performance by 5%-7%. Additionally, a total of 16 cosigners are now required to approve ring signatures, up from 11. The wallet sync time has also been sped up by 30-40% thanks to view tags. Several other upgrades were also carried out.
The event could potentially cause XMR prices to increase, thus prompting many users to go to crypto exchanges to purchase the cryptocurrency. However, XMR withdrawals and deposits were unavailable on many platforms prior and after the hard fork, while trading remained unaffected.
Yet, the crypto community is still reeling from recent painful experiences like that of Celsius, when users were unable to withdraw their digital assets, so this time they were looking for XMR withdrawal options.
Binance, Huobi, CoinEx, OKX, Changelly were among the popular crypto platforms that suspended both XMR withdrawals and deposits.
Meanwhile, non-custodial cryptocurrency exchange ChangeNOW was one of the few ones that didn’t restrict XMR transactions whatsoever.
To find out how ChangeNOW was able to continue providing XMR exchanges which would translate into XMR withdrawals on a regular CEX that were unavailable at the time, we reached out to ChangeNOW’s head of PR, Mike Ermolaev.
Bitcoinist: Mike, thank you for taking the time to answer our questions. To get the ball rolling, please explain what ChangeNOW is and how it differs from a centralized crypto exchange for those who are new to it.
Mike: It’s my pleasure. Okay, ChangeNOW is a non-custodial crypto exchange platform, differing from centralized exchanges in this respect. First and foremost, we do not have access to users’ private keys. You might have heard that saying, “Not your keys, not your coins.” So, we don’t store your coins. With us, you will receive the funds directly into your wallet following the exchange. In other words, our basic function is to assist you in obtaining digital assets you need. It’s that simple. More than that, aside from operations with over 500 assets we offer a full ecosystem of crypto-related products and services, such as NOW Wallet, a feature-rich, non-custodial crypto wallet that is widely used.
Bitcoinist: Good to know. Let’s jump right into the subject. Despite Monero being hard forked successfully, most exchanges stopped allowing withdrawals and deposits of XMR before and after the hard fork occurred. Why was this the case?
Mike: Apparently, they had to handle all technical updates on their side, while also avoiding a liquidity crisis. The Monero network was operating smoothly right after the hardfork, so it was probably a play-it-safe moment.
Bitcoinist: I see, but ChangeNOW continued to offer XMR exchanges, which would be equivalent to withdrawing on CEXs. How did you make it happen?
Mike: We didn’t disable XMR because we knew our users needed it, so we wanted to provide seamless access. To be honest, it wasn’t an easy ride because we had to balance out liquidity from reserve exchanges and relied on our own liquidity pool to keep things going. Our partner Cake Wallet also helped us with their liquidity.
So basically, we collected liquidity from all corners of pools, entering and exiting different providers’ doors one by one – a true spirit of adventure. It is good to have so many of those doors, as they definitely benefit our users.
Mike: We only stopped them for four hours during the hard fork itself on August 13 to make sure that we were on the right side of the fork following the upgrade and that payouts and deposits were processed correctly.
Aside from that, we kept offering our users limitless XMR operations through all this time. It’s always like that with forks – they have a great influence on the coin’s price (check out Ethereum chart in the run up to the upcoming Merge), and people want to take advantage of it, buying, selling or exchanging the coin, depending on its price move.
Bitcoinist: Have you dealt with any similar cases like that before?
Mike: This situation somehow reminds me of ChangeNOW’s experience with Dogecoin in early 2021 when it went in an upward spiral after being heavily hyped. While other exchanges disabled it, we continued processing it at favorable rates for users, albeit at a great loss for us. We have since learned our lesson and have greatly improved, including adding more liquidity providers and capacity to handle periods of market volatility. So this situation with XMR was definitely something we were prepared for.
Bitcoinist: Apart from getting off the right blockchain, what could hypothetically go wrong during a hard fork?
Mike: Hard forks are fundamental upgrades to the blockchain that are backward-incompatible. It’s not as simple as a straight line. The previous rules and structures of a cryptocurrency become invalid. To be compatible with the new version, all users, nodes, and blocks mined previously must be upgraded. It is possible that there will be hitches in the network’s consensus mechanism, like during the Berlin upgrade for Etherem, which took 12% of the network’s nodes offline shortly after the upgrade.
Bitcoinist: That’s very interesting! Mike, thanks for your insightful explanations, and best wishes to ChangeNOW.
Mike: You’re welcome! Thank you!
This interview was originally published on Bitcoinist.
Image source: changenow.io