Coinbase, the largest U.S. cryptocurrency trading service, has acquired a service called Paradex that lets customers trade all sorts of digital tokens on a so-called decentralized exchange.
Decentralized exchanges rely on smart contracts to let users trade tokens without a centralized authority (such as Coinbase or the NASDAQ) and record the transactions on a blockchain.
The concept of decentralized exchanges is popular among dedicated cryptocurrency enthusiasts, but is also far from mainstream adoption. (This article by Hacker Noon provides a good overview of how they work).
Paradex, which has 10 employees, is one of several startups pitching the technology as a way for consumers to get access to lesser known cryptocurrencies.
Coinbase, which did not disclose a price for the deal, described Paradex as “a sophisticated and secure relay platform that will allow our customers to trade hundreds of tokens directly from their wallets.”
Coinbase currently offers only four currencies—Bitcoin, Bitcoin Cash, Ethereum and Litecoin—on its platform, in part because the company is wary of regulatory uncertainty concerning which digital tokens must be registered as securities.
That uncertainty also means Coinbase will not immediately make Paradex available to American customers.
“After making some product enhancements, we’ll initially offer this experience to customers outside the U.S., and eventually to U.S. customers after we implement changes,” said the company in a statement.
While Paradex could theoretically compete with Coinbase, which is a centralized exchange, a spokesperson told Fortune the company sees Paradex users as a different pool of customers. He added that Coinbase is excited about the smart contract technology, and believes it could be used by retailers in the future.
The Paradex deal comes as Coinbase has been on an acquisition push as it looks to consolidate its position amid growing competition. This includes buying crypto site Earn.com and hiring a LinkedIn M&A veteran, Emilie Choi.
On Wednesday, Coinbase also announced a new brand called Coinbase Pro. The brand will replace GDAX, the company’s longtime trading platform for institutional investors.
Coinbase Pro will also feature a new design and chart features, and and a great range of historical data. Coinbase will retire GDAX on June 29 and roll all customers over to Coinbase Pro.