Coinbase, a US-based crypto exchange, is collaborating with a crypto company focused on privacy to build a decentralized exchange (DEX) platform.
Violet, a decentralized finance (DeFi) company, has issued a press release announcing its intention to develop Mauve, a DEX featuring both DeFi and traditional finance functionality (TradFi). The company will collaborate with many renowned investors, including Coinbase Ventures, FinTech Collective, and Brevan Howard, a $20 billion hedge fund.
According to Violet’s co-founder Markus Maier, the collapse of FTX, one of the largest crypto exchanges at the time, prompted the creation of Mauve. Maier said the FTX scandal eroded global confidence in cryptocurrencies, which he hopes to rebuild via Mauve.
Maier stated that Mauve was created as a response to the FTX fallout, which had a global impact on the trust in the crypto industry due to the misappropriation of funds. The continued adoption of non-custodial crypto exchanges is crucial for the future. Mauve enables its users to trade while retaining custody of their assets, thereby preventing unauthorized access or theft of funds. This feature helps to rebuild trust among both retail and institutional investors and restore confidence in the market.
Mauve will take architecture from DeFi that enables self-custody to guarantee that investors own their assets. TradFi will provide compliance assurances and disclosure to mitigate counterparty risk.
Philipp Barnhardt, one of the founders of Violet, expressed in a press release that their vision is to create a future without intermediaries, where all financial products and services operate on decentralized crypto rails. To achieve this, they believe there needs to be a strong integration between TradFi and DeFi, which is why they founded both Violet and Mauve.