Seed CX Courts Institutions With Flexible Collateral and Zero-Fee Makers

Seed CX is aiming at a different customer than most crypto exchanges. The platform is built for institutional investors, and according to co-founder and CEO Edward Woodford, that focus shapes its product choices, from how collateral is handled to how the company approaches licensing. Woodford joined Ledger Cast hosts Brian Krogsgard and Josh Olszewicz for an episode that covered how the business was built and what it takes to run an exchange that large investors will trust.

The platform offers margin of up to around 3x. On the collateral side, clients can post bitcoin or several forms of fiat currency, a flexibility that Krogsgard singled out as a notable feature for funds that hold cash in more than one currency and do not want to convert it to crypto before trading.

Fees are another point of difference. Taker fees are set at 8 basis points, or 0.08 percent, while maker fees are zero. That structure rewards traders who add liquidity to the order book, a model more often seen on professional venues than on exchanges that cater mainly to retail users.

Seed CX also runs a nightly settlement process. Trading takes place on the company's centralized platform, but each customer has its own wallets, and balances are settled at the end of each day. The hosts pointed to this arrangement as one of the more unusual parts of the design.

The conversation also covered the regulatory side. Woodford described the work involved in obtaining the proper licenses in the United States, a process that many crypto firms have found slow and expensive. He also discussed competing with what the hosts called "cowboy" exchanges, a term the industry uses for operators with looser standards. For institutional clients, that gap in standards is often the deciding factor.

The episode is a useful look at how an exchange built for professional money is put together. As with any trading venue, readers should do their own research before committing funds.