The Truth Behind Dumping XLM and Supporting XRP by Stellar-based Exchange
Why did Stellar-based Decentralized exchange, Stronghold adopted three pairs of XLM while adding XRP against two new pairs? Stronghold CTO explains the motive behind this decision.
The Reason Is Focus
Recently, we reported that Stronghold exchange has dropped three XLM trading pairs against Bitcoin, Ethereum, and its own native currency SHX while adding XRP with two new pairs.
This announcement led many XLM enthusiasts to question the motive behind doing this and asking for an explanation from the exchange.
Built on Stellar network, Stronghold is a distributed exchange that enables the users to buy Bitcoin (BTC), Ethereum (ETH), and Stellar Lumerms (XLM). The company has now, in response, released an official statement explaining its decision to drop XLM markets.
“We made this decision solely by looking at what we want to focus on,” said Sean Bennett, the co-founder and Chief Executive Officer of Stronghold, “not by thinking about which markets we should be taking down.”
Apart from the retail release of Stronghold USD, in the last 2-3 months, support for two new cryptocurrencies has been added that is Litecoin and XRP where the 3rd largest digital asset is the latest addition.
The Focus Is On Stronghold USD & Top Cryptos By Market Cap
Bennett went on to explain how they choose which cryptos to add or drop which is based on two market tiers that are Stronghold USD pairs and top digital asset pairs.
In Tier 1 markets, they have every asset that the platform supports and paired against its asset-backed US dollar token i.e. Stronghold USD which provides them with six markets BTC/USD, ETH/USD, LTC/USD, SHX/USD, XLM/USD, and XRP/USD.
“This ties in strongly with our payments infrastructure, as the overwhelming majority of the settlement we allow for is sent or is in with Stronghold USD.”
But the issue here is while not everyone has access to Stronghold USD, others don’t want access to it either. This is where Tier 2 markets come into picture which is to assist these people in trading and for liquidity and trades, select assets are offered in pair with BTC.
So, in this Tier, the focus is on market capitalization and the top three digital assets are picked which gives three markets viz. ETH/BTC, LTC/BTC, XRP/BTC.
“It is coincidental, but reassuring, that the markets we continue to support had the highest demand, by volume.”
As for what this means for Stronghold assets that are “anchored” on Stellar, Bennett assures, no changes have been made there. The exchange continues to anchor USD, BTC, ETH, LTC, and XRP on the Stellar Network.