Derivatives crypto trading platform, BitGet has announced the launch of a $200 million Protection Fund for its customers as the uncertainty in the crypto winter drags on. As revealed by the trading platform, the Protection Fund comprises 6,000 Bitcoin (BTC) and 80 million USDT worth approximately $200,000 at the time of announcement.
The recent events and collapse of the top firms in the digital currency ecosystem have tapered down trust, especially for the more risky forms of trading that BitGet offers. The investors’ Protection Fund comes off as a way for BitGet to regain investors’ trust by assuring them that the exchange has the right liquidity to withstand any form of upheaval in the market.
The composition of the fund has been tagged as a strategy to account for the volatility in the digital currency ecosystem. Should the price continue to slip, the USDT component of the fund will offer the needed balance, and should there be a recovery in the market, the Bitcoin component can catch the growth.
“The protection fund will help us mitigate investors’ concerns and attract potential users. As we continue to endure the crypto winter, it is crucial that our users can rest assured that their funds are kept safe,” said Gracy Chen, managing director of Bitget.
BitGet and the Diverse Trust Building Measures by Exchanges
Trading exchanges in operations today are exploring quite a number of measures to maintain trust in the platforms.
Notably, safeguarding users’ trust through protection funds was kickstarted by the Binance exchange as far back as 2018. While BitGet has chosen to self-fund the reserve capital pool for the next three years, the Binance model involved allocating 10% of trading fees into the protection fund.
The fund hit the $1 billion benchmark earlier this year, cementing the trust most users have for the Binance exchange as the world’s largest platform with the deepest liquidity pool.
KuCoin’s CEO, Johnny Lyu has also been spending his time and resources to allay user’s fears about the possibility of the exchange going bankrupt according to rumors that made the rounds last week. In a bid to wade off FUD and maintain trust in the community, Lyu set up a $10 million fund to help combat fake news
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