- The Giottus CEO shares a “utility vs casino” analogy for different types of crypto exchanges.
- Subburaj says that an exchange can influence the decision of a crypto trader.
- In India, well-designed exchanges could help traders stay away from impulsive decisions.
As digital assets continue to gain traction and the number of crypto exchanges increases, so do the risks for traders. But users are still not aware of how to respond to these losses. In India, crypto users are often told to stay calm and avoid emotional decisions after facing a severe loss.
However, Giottus CEO Vikram Subburaj believes that the way a crypto exchange is designed could help the way traders react when things go wrong. According to the Giottus CEO, crypto exchanges are designed to serve two very different kinds of users. His use of the “utility vs casino” analogy helps to understand this difference. The key question here is whether an exchange can influence users’ decision making it easier to trade.
Giottus CEO’s “Utility vs Casino” Analogy Explained
In a recent official post on LinkedIn, Giottus CEO Vikram Subburaj shared two different types of focuses in crypto exchanges, especially in India. To elaborate on his idea, he used an analogy with two different platforms- a utility and a casino.
With this comparison, Subburaj is explaining the requirements of crypto users as well. One group of investors simply needs a reliable platform to buy, sell, and manage their digital assets without unnecessary distractions. At the same time, there is another group that is more focused on speed, frequent trades, and market activity excitement.
According to Subburaj, both types of users exist on the same platform. But their behaviour and expectations will be very different. He added,
“I have seen what happens when platforms design purely for the second group, because the product slowly becomes an engine for noise. I have also seen platforms pretend the second group does not exist, which means misunderstanding a real part of the market you serve.”
With this statement, the Giottus CEO means that crypto exchanges should not be designed exclusively for the second group of users. They should find a balance between these two groups. If an exchange encourages constant trading and excitement, it can lead to unnecessary activity and impulsive decisions. The exchanges should also not ignore active traders. That’s why Subburaj encourages crypto exchanges to support both groups, encouraging people to make informed decisions.
How Can Crypto Exchanges Influence Traders’ Behaviour?
As noted by the Giottus CEO, a crypto exchange’s design has a significant role in the traders’ behaviour. For example, a crypto exchange’s features such as how quickly a trade can be made, how risks are displayed, and what information appears before a transaction can influence the trader. These features can either encourage or discourage their decisions.
In India, this is very important as frequent trading can bring additional costs and increase chances of mistakes. If a trader repeatedly places trades after a loss, they will tend to make emotional decisions. While they make additional trades to recover the previous losses, it may cause further losses. In such a situation, a well-designed crypto exchange can help traders slow down, understand risks, and make more informed decisions. It could help them stay away from impulsive trading.
But where does the responsibility of an exchange begin? It is worth noting that crypto exchanges cannot control all decisions of a user. Also, active trading is a legitimate part of the market. However, exchanges can see if their products help their users to make decisions. Before the trade, the exchange’s risk warnings, fee information, and other details could help users in their next move. They can get clarity on whether to move forward or pause the trade.
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In India, traders continue to trade despite facing losses. A loss does not always mean stepping away from the market. If funds are lost, the user’s next urge is to recover them through the next trade. Here, the need for a responsible exchange is very important.
This is why Indian crypto users should choose an exchange via a thoughtful process. Instead of checking how easy the procedures are, traders must look at more features like transparent fees, clear risk information, trade guidance, and more. Even for new users, these features could help them place trades wisely.
Now comes the bigger question- is the platform designed for the trader or for the trade? The simple answer is that a crypto exchange should not solely focus on trades. The main agenda of a platform should not be making trades easier, but to remain together with the traders on their moves with responsibility.
Related: India’s 4.45% Inflation Puts RBI Policy in Focus: Is Rupee at Risk?
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