Interview: CEO of OKEx Jay Hao and the Lightning Network Team on Platform’s Adoption of Bitcoin Layer-2 Scalability Solution
The leading global crypto exchange and derivatives trading platform OKEx recently announced support for Bitcoin’s scalability solution, Lightning Network. Regarding the new development, we had the opportunity to interact with Jay Hao, CEO of OKEx and the Lightning Network (LN) team. We asked them few questions and this is what they had to say.
Q: Is it true that OKEx is going to adopt the Bitcoin Lightning Network? How is it going to work in OKEx’s context?
Jay Hao (OKEx): Yes! We began our integration journey with the help of Lightning Labs in January and recently completed the integration of the Lightning Network. This means that OKEx will become a participating node in the network and users on the OKEx exchange will be able to select the Lightning Network option when they want to deposit or withdraw Bitcoin for cheaper and faster transactions.
Q: What are the foreseeable benefits of Lightning Network for OKEx as well as its userbase?
Jay Hao (OKEx): For OKEx, we are thrilled to be able to support the development of the Bitcoin ecosystem by partnering with Lightning Labs and increasing the number of participating nodes in the Lightning Network. This partnership highlights our deep commitment to the continued growth of the space and, for our users, it provides them with the benefits of greatly reduced transaction times and fees – they can send and receive BTC almost instantly and at next-to-no cost.
LN: OKEx’s Lightning Network integration brings a massive UX upgrade to bitcoin for their users. Deposits and withdrawals over Lightning are almost instant and nearly free, especially compared to on-chain transactions. On-chain bitcoin is the slowest asset moving around the crypto financial system, but Lightning makes it the fastest, opening up new use cases like inter-exchange arbitrage and instantly topping up margin during periods of high volatility. We are excited for OKEx’s users to experience the benefits of bitcoin over Lightning.
Q: Can you give us some insights into the entire process of collaborating with OKEx to implement Lightning Network?
LN: OKEx made it easy! Our open-source code and documentation at docs.lightning.engineering simplifies the onboarding process and makes it easy for anyone to integrate Lightning. OKEx utilized our publicly available resources and our team was available to answer questions to support the process. Another great resource for implementation is the LND Developer Slack, where our team and the entire community is available to answer questions and help newcomers onboard to Lightning.
Q: The recent Bitcoin bull run drove a lot of people towards crypto trading platforms resulting in a surge in traffic and trading volumes. How is OKEx handling it? Will the implementation of Lightning Network make any difference if a similar scenario repeats in the future?
Jay Hao (OKEx): It’s true, we have seen a large increment in our user base from all around the globe. In the APAC region alone, trading volume shot up 3x from September 2020 until now. We are continually upgrading our infrastructure to ensure a smooth onboarding experience for new customers and a seamless trading experience for existing customers. Integrating the Lightning Network will allow them all to obtain cheaper and fast transactions. This is just one of the ways in which we aim to make OKEx their platform of choice.
Q: Where does the development of Lightning Network stand at the moment? What are the future plans to further improve Bitcoin’s L2 solution?
LN: The Lightning Network is fairly stable at this point. As node operators have learned how best to manage their liquidity, payment success rates are continuing to grow and end-user adoption is increasing. OKEx joining the network is a huge vote of confidence, and we expect their users to be impressed by how fast and cheap bitcoin transactions can be. Future improvements will be focused on UX with features like Atomic Multipath Payments (AMP) that allow for static invoices, and on optimizations enabling higher throughput for use cases like streaming payments and high-frequency trading.
Q: Will it be possible for you to let our readers know how many exchanges and trading platforms are currently using Lightning Network?
LN: There are over 15 exchanges currently using the Lightning Network, tracked in this community repository. Bitrefill recently announced that in Q1 they began receiving payments over the Lightning Network from 105 different countries! So usage is very widespread.
Q: What are the steps taken by your team to further popularize the Lightning Network?
LN: The majority of our work is behind the scenes, building the infrastructure that Lightning-enabled companies like OKEx depend on. When end-users are exposed to the dramatically improved experience of Lightning payments over on-chain payments, Lightning speaks for itself. We do shine a spotlight on the growing Lightning community in our monthly newsletter, and host biweekly voice chat rooms on Clubhouse and on Discord for those that want to learn directly from our team.
Q: What are your thoughts about the future of Bitcoin as the price continues to rise? Will it ever become a layman’s currency, or will it just end up reinforcing its position as an investment instrument?
Jay Hao (OKEx): We are still in the early days of adoption and, as each new wave of adopters onboards, we see increased volatility, which leads to many analysts and naysayers to point to Bitcoin’s inefficiency as a medium of exchange. Moreover, as the cryptocurrency appreciates in value, it is natural that its attractiveness as a store of value increases. However, I do believe that Bitcoin has the potential to become a dominant form of money. I don’t think that it will be the only one but, with the increased improvement and adoption of technologies like the Lightning Network making it easier and faster to use, and as more people transfer over to using Bitcoin, there is an ever-increasing case for it to become a layman’s currency. OKEx is proud to play a part in helping to take BTC to the rest of the world.
LN: As previously mentioned, Bitrefill recently announced that they received payments over Lightning from 105 different countries in Q1 of 2021. Bluewallet is seeing 500+% annual user growth in their mobile Lightning wallet product in countries like Brazil, Nigeria, Argentina, and Israel. Strike launched in El Salvador a few weeks ago with their mobile Lightning wallet targeted at remittances and immediately became the most downloaded overall app in the country. They allow end-users to pay Lightning invoices from their fiat-denominated balances so that the user spends dollars but the receiver earns bitcoin.
Bitcoin is a currency for everyone! It is already serving a widely distributed group of users. While hodling is still the dominant use case for bitcoin, it’s much more than just a digital rock, especially when lifted into the Lightning Network. As more people worldwide switch to the Bitcoin standard, we expect this trend to continue.
Q: Anything you would like to add?
Jay Hao (OKEx): It is our belief that the cryptocurrency industry can only grow through collaboration. By working together, industry participants can help achieve the goal of advancing cryptocurrency globally and empowering individuals to achieve financial freedom. We couldn’t be happier to be able to take this next step forward with such an innovative partner in Lightning Labs.
LN: We are on a mission to promote financial freedom by bringing bitcoin to the next billion people with the Lightning Network. Every new node strengthens Lightning’s network effect, especially when the new node has as many users as OKEx. We are thrilled that OKEx has upgraded their bitcoin UX for users, allowing them to transfer value instantly and cheaply with the same security assurances as on-chain bitcoin.