The Rise of Cube: A Solana-Aligned Centralized Exchange

In the rapidly evolving world of cryptocurrency, innovation is key to staying ahead of the curve. Enter Cube, a groundbreaking centralized exchange (CEX) that's setting new standards in the industry. Founded by Bartosz Lipiński, a veteran of the Solana ecosystem, Cube is leveraging cutting-edge technology to create a trading experience that's fast, secure, and truly crypto-native.

Bartosz Lipiński, the mastermind behind Cube, joined the Lightspeed podcast to discuss his journey from Solana Labs to founding his own exchange. With a background in traditional finance and a passion for blockchain technology, Lipiński brings a unique perspective to the world of crypto trading.

Solana: The Foundation of Innovation

Lipiński's journey into the world of Solana began during the COVID-19 pandemic. After leaving his position at Citadel, where he built trading systems, he found himself drawn to the rapidly growing decentralized finance (DeFi) ecosystem. It was during this time that Solana caught his attention, thanks in part to the charismatic tweets of Anatoly Yakovenko, Solana's co-founder.

"Solana was totally random," Lipiński recalls. "Before Solana, I worked primarily in traditional finance, like Citadel Building Trading Systems. I left right when COVID was starting, and the non-compete kind of forced me to stay at home. It was just as the DeFi summer was starting."

This serendipitous timing led Lipiński to join Solana Labs, where he would go on to make significant contributions to the ecosystem, particularly in the realm of non-fungible tokens (NFTs).

The Birth of Solana's NFT Ecosystem

One of Lipiński's most significant contributions to Solana was his work on the NFT standard and the creation of Metaplex. Recognizing the limitations of existing NFT platforms on other blockchains, Lipiński set out to create a system that was both simple to use and highly efficient.

"I wanted NFTs on Solana to be very simple," he explains. "A couple of objectives were there, which I don't want anyone to run like deploy smart contracts, build a rust code, like ideally they have used JavaScript CLI and can launch their NFT projects in under five minutes if they have the art, like directly on chain."

This vision led to the development of Metaplex, which has since become the backbone of Solana's thriving NFT ecosystem. In fact, Lipiński reveals that "99% of NFTs on Solana go through Metaplex."

The Hacker House Revolution

Another significant contribution Lipiński made to the Solana ecosystem was the creation of the Hacker House program. Recognizing the need for in-person collaboration and community building during the pandemic, Lipiński and his team launched a series of physical events that would bring developers together to work on Solana projects.

"We started this series of physical events called hacker houses," Lipiński recounts. "And then we went on like 25 of them around the world."

These events proved to be a massive success, providing a much-needed alternative to traditional conferences and fostering a sense of community among Solana developers.

Cube: The Next Evolution in Crypto Trading

With his extensive experience in both traditional finance and the Solana ecosystem, Lipiński set out to create Cube, a centralized exchange that would address the shortcomings of existing platforms while leveraging the strengths of blockchain technology.

"Even though I worked previously in finance and like built like spent years there, I felt like exchange space in crypto is extremely saturated," Lipiński admits. "There's like 700 exchanges. And like a lot of them are very well capitalized. And they have like massive teams, like, you know, the Smirt from Coinbase."

However, the collapse of FTX revealed a critical flaw in many existing exchanges: a lack of true blockchain integration. Lipiński saw an opportunity to create something different – a crypto-native exchange that would be fully aligned with the principles of blockchain technology.

MPC Wallets: Enhancing Security and User Control

One of the key innovations that sets Cube apart is its use of multi-party computation (MPC) wallets. This technology allows for enhanced security and user control without sacrificing the convenience of a centralized exchange.

Lipiński explains the concept using an analogy: "Let's imagine you have like one dollar. We split it across multiple people, let's say like Mert here and Garrett, and you get the pieces of that dollar, and then if you want to spend it, you need to ask those like participants like Mert and Garrett, like, hey, you need to have more than 50% of that dollar to spend it."

This approach provides a level of security and transparency that is often lacking in traditional centralized exchanges, where users must trust the platform entirely with their funds.

Solana Integration: Speed and Efficiency

Cube's integration with Solana goes beyond simply listing SOL as a tradable asset. The exchange is built using Solana's validator client, creating what Lipiński describes as a "Solana appchain."

"We are making a long term bed on Solana validator client and people that are building like look us from JITA and people from fire dancer that the validator client will keep improving," Lipiński explains. This deep integration allows Cube to achieve remarkable speed and efficiency in its operations.

"Right now, the matching engine and the connectivity to cube is faster than what you would see on on finance Coinbase and like very close to CME," Lipiński boasts. "Like we are talking about like round trip take to fill for the switch is 200 microseconds."

The Future of Cube and Crypto Trading

As Cube continues to evolve, Lipiński has ambitious plans for the platform. When asked about his vision for the next five years, he confidently states, "We are competing with my CNCME."

This goal reflects Lipiński's belief in the potential of crypto-native exchanges to revolutionize the financial industry. By combining the speed and efficiency of blockchain technology with the reliability and user-friendliness of traditional exchanges, Cube aims to set a new standard for crypto trading.

Building a Startup in the Crypto Space

For aspiring entrepreneurs looking to enter the crypto space, Lipiński offers valuable insights based on his experience building Cube. He emphasizes the importance of focusing on talent and creating a collaborative work environment.

"Focus on talent which is like I prefer to have a smaller team of like highly talented like engineers and everyone around them," Lipiński advises. He also stresses the importance of in-person collaboration, especially when building complex systems like an exchange.

"I'm collocating almost everyone on the team. So the team is not remote we are like full inch cargo every day in the office like sitting back to back with each other like coding," he explains. This approach, while challenging in terms of hiring, allows for rapid problem-solving and efficient communication.

The Solana Advantage for Startups

When asked about what would attract him to Solana if he were joining crypto today, Lipiński highlights the ecosystem's unique advantages for startups:

"This is the place where I can quickly test product market fit. I want probably a chain that has users that will try my product like quickly and I can learn from them and I think Solana has a great advantages for that because it has it's cheap and it has users that want to try things."

This combination of low costs and an active user base makes Solana an attractive platform for entrepreneurs looking to innovate in the crypto space.

Regulatory Challenges and Global Expansion

As with any financial platform, regulatory compliance is a significant consideration for Cube. Lipiński acknowledges the challenges of navigating the complex and often conflicting regulatory landscape across different jurisdictions.

"The regulation like for finance is just tricky around the globe," he admits. "And it often has like conflicting interests, right? Because like countries want to control their currencies, they, some countries want to control flow of funds."

Despite these challenges, Lipiński remains optimistic about Cube's ability to expand globally. He emphasizes the importance of careful analysis and strategic decision-making when entering new markets.

The Evolution of Crypto Exchanges

Lipiński's vision for Cube reflects a broader trend in the crypto industry towards more integrated and vertically aligned platforms. He predicts that successful projects in the space will increasingly look to expand their offerings:

"I believe any successful project in crypto will try to start like uh have a wallet start their own chain and eventually start their own exchange in one shape or form like uh exchanges right now is where um there's the strongest product market fit in crypto."

This trend towards vertical integration could lead to a more consolidated and efficient crypto ecosystem, with platforms like Cube at the forefront of innovation.

Lessons from Solana's NFT Boom

Reflecting on his experience launching Solana's NFT ecosystem, Lipiński shares valuable insights into the process of bootstrapping a new technology. He emphasizes the importance of education and community building, recalling the "hand-to-hand combat" of running weekly office hours to teach developers how to use the new NFT tools.

This hands-on approach to ecosystem development has clearly influenced Cube's strategy, with a focus on creating tools and infrastructure that are accessible and easy to use for both developers and end-users.

The Importance of Rapid Execution

When asked about his biggest fear for Cube, Lipiński doesn't hesitate: "Speed of execution." This focus on rapid development and deployment is a common theme throughout the interview, reflecting the fast-paced nature of the crypto industry.

For Lipiński and the Cube team, staying ahead of the curve means constantly innovating and adapting to new challenges. This mindset is evident in their approach to everything from product development to team building and market expansion.

Advice for Aspiring Crypto Entrepreneurs

For those looking to start their own projects in the crypto space, Lipiński offers simple but powerful advice: "Just build something don't don't wait for the like right idea or the right time like just start building."

He also emphasizes the importance of finding co-founders and early adopters: "Once you have something the the next most important thing is convince a single person to to use it and they should be your like co-founders like don't do it yourself like one one person start ups just like rarely work."

The Future of Blockchain Integration in Finance

As Cube continues to push the boundaries of what's possible in crypto trading, Lipiński's vision extends beyond just creating another exchange. He sees Cube as part of a larger movement towards true blockchain integration in financial services.

By leveraging Solana's speed and efficiency, along with innovations like MPC wallets, Cube is working to create a trading experience that combines the best aspects of centralized and decentralized finance. This hybrid approach could well represent the future of crypto trading, offering users the security and transparency of blockchain technology with the convenience and liquidity of traditional exchanges.

Conclusion: A New Era for Crypto Trading

With Cube, Bartosz Lipiński and his team are not just building another cryptocurrency exchange – they're reimagining what's possible in the world of digital asset trading. By combining deep blockchain integration, innovative security measures, and a user-centric approach, Cube is positioning itself at the forefront of the next generation of crypto platforms.

As the industry continues to evolve, projects like Cube serve as a testament to the ongoing innovation in the Solana ecosystem and the broader crypto space. For traders, developers, and crypto enthusiasts alike, the future of digital asset trading looks brighter than ever.

Facts + Figures

• Bartosz Lipiński joined Solana during the COVID-19 pandemic after leaving his position at Citadel.
• Lipiński was responsible for hiring people at Solana Labs and building reusable components for other teams.
• The NFT standard on Solana and Metaplex were created by Lipiński and his team.
• 99% of NFTs on Solana go through Metaplex.
• The Hacker House program, started by Lipiński, conducted 25 events around the world.
• Cube, founded by Lipiński, is a centralized exchange built using Solana's validator client.
• Cube uses multi-party computation (MPC) wallets to enhance security and user control.
• The matching engine and connectivity of Cube is faster than Binance and Coinbase, with a round trip take to fill of 200 microseconds.
• Lipiński aims for Cube to compete with CME (Chicago Mercantile Exchange) within five years.
• The Cube team is not remote, with all members working together in an office to optimize communication and problem-solving.
• Solana's advantages for startups include low costs and an active user base willing to try new products.
• Lipiński predicts that successful crypto projects will eventually expand to have their own wallet, chain, and exchange.
• Cube plans to add perpetuals, margin facilities, and other features available from non-US crypto exchanges in Q1 and Q2 of the next year.
• Lipiński got into crypto in 2010, mining Bitcoin, but regrets throwing away his hard drive containing Bitcoin.
• The podcast was recorded on December 26, 2023.

Questions Answered

What is Cube?

Cube is a centralized cryptocurrency exchange founded by Bartosz Lipiński. It's designed to be a crypto-native platform that leverages Solana's technology to provide fast, secure, and transparent trading. Cube uses multi-party computation (MPC) wallets and integrates deeply with Solana's validator client to create a unique trading experience that combines the best aspects of centralized and decentralized finance.

How does Cube differ from other cryptocurrency exchanges?

Cube stands out from other exchanges due to its deep integration with blockchain technology, particularly Solana. It uses MPC wallets for enhanced security and user control, and its matching engine is built on Solana's validator client, allowing for extremely fast transaction speeds. Additionally, Cube aims to be more transparent by allowing users to verify their balances on-chain, a feature not commonly found in traditional centralized exchanges.

What is Bartosz Lipiński's background in the crypto industry?

Bartosz Lipiński entered the crypto industry during the COVID-19 pandemic after leaving his position at Citadel, where he built trading systems. He joined Solana Labs, where he played a crucial role in developing the NFT standard and creating Metaplex. Lipiński also initiated the Hacker House program for Solana, organizing events worldwide to foster community and innovation. His experience spans both traditional finance and blockchain technology, giving him a unique perspective in building Cube.

What are MPC wallets and how do they enhance security?

MPC (Multi-Party Computation) wallets are a security feature used by Cube to protect users' funds. This technology splits control of assets across multiple parties, requiring a consensus to authorize transactions. Lipiński explains it as splitting a dollar among multiple people, where spending requires agreement from more than 50% of the participants. This approach enhances security by distributing trust and reducing single points of failure, while still maintaining the convenience of a centralized exchange.

How does Cube leverage Solana's technology?

Cube is built using Solana's validator client, essentially creating what Lipiński calls a "Solana appchain." This deep integration allows Cube to achieve extremely fast transaction speeds, with a round trip take to fill of 200 microseconds. By leveraging Solana's technology, Cube can offer a trading experience that's faster and more efficient than many traditional exchanges, while still maintaining the benefits of blockchain technology.

What is Lipiński's vision for the future of Cube?

Lipiński envisions Cube competing with major traditional exchanges like the Chicago Mercantile Exchange (CME) within five years. His goal is to create a platform that combines the speed and efficiency of blockchain technology with the reliability and user-friendliness of traditional exchanges. This ambitious vision reflects Lipiński's belief in the potential of crypto-native exchanges to revolutionize the financial industry.

What advice does Lipiński offer to aspiring crypto entrepreneurs?

Lipiński emphasizes the importance of taking action and building something tangible. He advises, "Just build something, don't wait for the right idea or the right time." He also stresses the importance of finding co-founders and early adopters, stating that convincing even a single person to use your product is a crucial step. Lipiński believes that one-person startups rarely work in the crypto space and encourages collaboration and team-building.

How does Cube approach regulatory challenges in the crypto industry?

Lipiński acknowledges that navigating the regulatory landscape for crypto exchanges is challenging, especially on a global scale. He notes that different countries have conflicting interests when it comes to controlling currencies and fund flows. Cube's approach involves careful analysis and strategic decision-making when entering new markets, ensuring compliance while still pursuing global expansion. Lipiński views these challenges as part of the process of building a financial institution in the crypto space.

What role did Lipiński play in developing Solana's NFT ecosystem?

Lipiński was instrumental in creating Solana's NFT standard and founding Metaplex. His goal was to make NFT creation and deployment on Solana simple and accessible, allowing users to launch NFT projects in under five minutes using JavaScript CLI. This work led to the rapid growth of NFTs on Solana, with Metaplex becoming the primary platform for NFT creation on the blockchain. Lipiński's efforts in this area significantly contributed to Solana's thriving NFT ecosystem.

What does Lipiński see as Solana's main advantage for startups?

According to Lipiński, Solana's main advantage for startups is its ability to quickly test product-market fit. He cites Solana's low costs and active user base as key factors that make it attractive for new projects. Lipiński believes that Solana provides an environment where developers can rapidly deploy and iterate on their ideas, getting quick feedback from users who are eager to try new products. This combination of speed, affordability, and an engaged community makes Solana an ideal platform for crypto innovation.