The Liquid Platform: a world leading digital asset exchange built to provide liquidity to cryptocurrency markets
Although Solving the liquidity problem of cryptocurrencies is at the core of the Liquid platform’s value proposition, the platform incorporates intuitive features which makes it a haven for retail and institutional investors alike.
Crypto and Fiat Currency Exchange | Trade with Liquid.com
With over 2000 cryptocurrencies listed on coinmarketcap, the belief in the potential of the crypto token economy as the future of finance is getting stronger, with the premise of making financial services accessible to all by leveraging the decentralization achieved through blockchain technology.
QUIONE is a global fintech company that provides exchange, trading and a suite of financial services, and is officially registered and licenced by Japanese regulatory body Japan Financial Services Agency (License 0002). QUIONE is the company responsible for building the Liquid platform which is backed by the QASH token.
The Liquid platform, in my opinion, is closest to offering a complete product of what a cryptocurrency exchange should be. It features technical optimizations grounded on the experience of QUIONE team to provide a convenient, easy to use trading platform with features that cover both beginners and advanced traders and a suite of services tailored to bridge the worlds of fiat and crypto and onboard institutional investors.
About Liquid
“Liquid is a unified, globally-sourced trading platform that bridges the worlds of fiat and crypto.”
On September 4th, the Quione community successfully migrated to the new Liquid platform in a phased rollout, and as of writing this article, everything is functional except the few features that are scheduled for later release. This heralds the completion of a journey that has taken the Quione community four years of experience and work to put together the innovative technical architecture.
To understand Liquids all-encompassing value proposition, we need to go back to basics and examine it from a beginners perspective, through to the expert trading options, the “behind the scenes” technical infrastructure that makes it work and the ecological contributions the liquid and Quione team will make to the global blockchain and cryptocurrency community as a whole.
Information on cryptocurrency trading is mostly subjective, with few objective analysis interspersed in the general confusion. Speculation and manipulation are rife, and these contribute to its allure as an investment tool to the investors with higher risk appetites while consequently diminishing its attraction to the larger risk-averse and conservative community. If you are going to get into cryptocurrency trading, you will probably do so through an exchange.
What should you look for in an exchange?
🔹 Security
Security is paramount for any digital asset exchange. Recent hacks on cryptocurrency exchanges highlight the need for proper storage of users digital assets when they are on the exchange. For ordinary users, security is a distant second to speed when it comes to trading. They need to be able to withdraw their funds fast and easily. There are therefore two sides to ensuring security of users funds while they are on the exchange. Although the biggest threat arises on the exchange side , the exchange infrastructure should make it possible for the client side to ward off phishing and scammer attacks.
The biggest loss of funds from a cryptocurrency exchange was in 2014, when Mt. Gox lost 850, 000 BTC . Mt Gox was at the time handling over 70% of all Bitcoin transactions worldwide. It is alleged that hackers compromised the exchange and stole 744,408 bitcoins belonging to customers and an additional 100, 000 Bitcoins belonging to the exchange. The presumption is that most of the Bitcoins were stolen from online “hot” wallets, with the additional Bitcoins being stolen from cold wallets as a result of the hot wallets being compromised. This incident led to the insolvency of Mt.Gox, since then, 200,000 BTC have been recovered from some old storage wallets and are held in Trust for users. Theft, fraud and mismanagement are commonly cited to behind Mt. Gox’s unfortunate failure.
Bitfinex which is still operational and is consistently ranked the second exchange by volume, was also compromised in August 2016, losing 73 Million USD in funds after hackers got access to users’ aggregated wallets.
Hackers successfully made away with 523 million NEM tokens worth approximately 500 million USD, from Coincheck a Japanese digital asset exchange early this year.The funds were reportedly stolen through several unauthorized hot wallet transfers. This incident led to questions about low security standards, particularly the use of a simple hot wallet rather than a multi-sig wallet, a measure which requires multiple sign-offs before funds can be moved.
These incidents highlight the need for effective security measures on the exchanges’ end.
Liquid platforms security measures
QUIONE has implicitly implemented security strategies which makes Liquid one of the most secure cryptocurrency exchanges. The key highlight is the provision of 100% cold wallet storage.
Infrastructure
100% cold wallet storage
Multisignature technology for the authorization of BTC and BCH transactions
Whitelisting of withdrawal wallet addresses
No API withdrawals
4-step withdrawal process:
Request2. 2-factor authentication3. Email confirmation4. Withdrawals processed manually by approved team members in an offline environment
Organization
Crisis Management Committee led by CEO Mike Kayamori
Weekly security review by third-party company and twice-yearly review by external experts
Policy to only list currencies that can be stored in cold wallet
Mandatory implementation and use of 2-factor authentication to access a Liquid account
🔹 Regulation
Before beginning trading, you should be well conversant with the present regulations regarding cryptocurrencies in your country, and the general temperament which may influence future regulations. Trading cryptocurrencies also carry Tax implications, dependent on your tax residency. More on regulation is covered under the “Built for Institutional investors” section.
As aforementioned, Liquid is a regulatory compliant trading platform. QUIONE is officially registered and is licenced by the Japanese regulatory body, Japan Financial Services Agency and therefore complies with Know-your-customer(KYC) and Anti-Money Laundering Policies. The liquid platform is open to everyone except persons from the FATF high risk list.
US customers won’t have access to fiat pairings and Japanese customers will only have access to currencies and services approved by the Japan Financial Services Agency,
🔹 Type of Exchange (Fiat exchange vs Crypto to crypto)
Fiat exchanges allow users to exchanged government backed fiat currencies like Euro and Dollars for cryptocurrency. A popular fiat exchange examples is Coinbase.
Cryptocurrency to cryptocurrency exchanges only allow cryptocurrencies to be exchanged for each other. These cryprocurrencies are usually are usually paired with the popular cryptocurrencies such as Bitcoin, Etherium or the exchanges native coin which acts as the fuel for transactions (transaction fees)A popular crypto to crypto exchange is Binance.
The type of cryptocurrency you wish to obtain and the payment method you wish to use will influence the type of exchange you will use. The Liquid platform conveniently combines the functionalities of fiat/crypto and crypto/crypto exchanges within one platform.
👉 The Liquid platform boasts an impressive array of fiat/crypto and crypto/crypto pairings. Supported Fiat currencies include HKD, AUD, CNY, INR, JPY, PHP, IDR, USD, EUR, SGD. More is covered later under the MMO & Worldbook topic
A list of currently supported Fiat currencies
🔹 Operational Factors
In my opinion, these encompass how the exchange handles the customer’s trading experience;
- User friendliness of the exchange
- Customer support
- Trading fees
My first impression on Liquid’s landing page was simplicity and user-friendliness of the page layout and themes. In fact, I may have had the impression that it was a travel and adventure website owing to the silhouettes of diving explorers on the bottom right. The allegory here is that the Liquid platform will offer users new opportunities to discover in cryptocurrency investments.
Going Liquid
Trading on liquid is quite easy. To begin, you will need to register on the official website. The registration covers both institutional and private investors.
After registration, you will need to set up a two-factor authentication (2FA) for your account. Liquid supports three 2FA methods which include SMS verification, email verification and Google authenticator.
🔹 KYC Compliance
The Liquid platform is compliant with regulations regarding cryptocurrency exchanges. To trade on liquid, the User has to complete KYC requirements in an easy three part process.
- Attach a government issued Identification document i.e Personal ID, Drivers License or Passport
- Attach a clear selfie
- Attach a proof of residence document
Liquid provides an option for account verification via video calls through Skype, ZOOM, Whatsapp or any option that is most convenient to the customer. Ideally, the process can take 1–2 working days though in practice it takes much shorter depending on the quality of the documents submitted.
I undertook verification through video call via the ZOOM conferencing app. The whole process took less than an hour which was quite impressive.
🔹 Setting up your Workspace (convenience)
Now that your account is verified, and secured via the 2FA method of your choice, you can begin trading or investing in your favorite crypto assets. The default go-to layout is quite clean and legible.
The default workspace is quite clean and legible
On the liquid platform, you can customize the arrangement of your interface . There are three color options, blue, dark and light. I prefer dark because I feel the contrast suits me well.
🔹 Tutorials and Information
Most functions on the liquid platform are accompanied by a tutorial or help link in case the user is unsure of what to do.
🔹 Trading Fees
For spot trading, the Liquid platform supports multiple order types including; limit orders, market orders, stop orders and trailing stop orders.
Currently, Liquid has some of the lowest trading fees if not the lowest among cryptocurrency exchanges. To highlight, here are the current rates for spot trading
For crypto/fiat pairs, trading fee is zero for all pairs (home and non-home).
For crypto/crypto pairs that were previously on Qryptos only:
- 0.15% execution value for market taker
- -0.075% execution value (rebate) for market maker
Also note that Liquid does not charge withdrawal fees at the moment. To learn more on Liquid’s fee structure, visit this link
🔹 lending
Any user regardless of trading level experience can generate cool passive incomes through lending on the liquid platform. Lenders accrue daily interest from the money they lend out to traders on the time basis that those trades remain open. The funds are returned to the lender once the trade is tied and closed.
On the Liquid platform, proposals from lenders are listed as “loan offers” in an aggregated list that can be sorted in terms of lowest interest rates, total loan amount, etc. N.B until a trader takes up a loan offer, the funds remain in the lender’s balances.
a portion of the BTC lending market available on Liquid.
To learn more on Lending on Liquid, follow this link
🔹 margin trading
Margin trading is made possible by the lending market. Traders take loans so that they are able to invest a larger amount of coins than they have which would lead to a bigger profit. On the other hand, lenders gain from the interest charged on the loans. On the liquid platform, anyone can lend out their funds to margin traders.
Margin trading allows for users to bet for or against the market. The trader leverages his existing balances to access more funds. For example a 10 x leverage means for every dollar you have, you will get ten extra dollars to invest.
For example, working with an initial capital worth 200 USD of crypto assets, When you go “long”,(bet that market prices will rise for the given crypto asset e.g Bitcoin) at a 10x leverage, You will be able to open a position worth 2000 USD . With a 10x leverage your profits are multiplied ten times, for example if bitcoin rises by 15% you will make 300 USD from your 2000 USD position which is ten times more than the 30 USD you could have made from your initial capital worth 200 USD.
The cost of a margin position includes the fees charged by the exchange for opening positions plus the interest that accrue from the borrowed funds. The maximum amount of money a margin trader can lose from a position is the total amount he/ she personally invested to open the position. It is the value at which the exchange will automatically close the position held by the trader to protect the borrowed funds.This is referred to as the liquidation value.
Margin trading is risky but the potential for profits are greater than simple spot trading.
Liquid allows traders to access upto 25x leverage. Currently margin trading is live on BTC, ETH, BCH and XRP. Liquid offers a level of personalisation through the flexibility of funding only accessible at Liquid.
The liquid Margin trading dashboard provides indepth info and charts for monitoring your margin trades and analyzing your positions.
Tackling the liquidity problem of cryptocurrency markets
“Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.” Investopedia.
Lets first define liquidity. In the simplest terms, liquidity is synonymous with price stability. Market liquidity is the degree to which a market allows users to sell an asset without causing a significant change in the market value of the given commodity. In another perspective, liquidity is a measure of how fast one can convert his assets, or securities into cash. In the context of cryptocurrency, both of these aspects of liquidity are hard to achieve owing to to market fragmentation and the fear of traditional financial institutions to engage with cryptocurrencies because of regulatory uncertainties.
Since liquidity is a direct function of supply and demand, the core of Liquids innovative features are the World book and MMO are integrated solutions to match the supply and demand of cryptocurrencies from multiple sources and aggregate it into one liquidity pool
“ QUOINE is launching QUOINE LIQUID Platform, a single globally-sourced trading platform (World Book) with an associated suite of services (Prime Brokerage) which will enable the highest level of liquidity. In the process, this will allow anybody to tap into all the opportunities the new Crypto economy has to offer.” Excerpt from whitepaper.
- Although a given exchange might offer liquidity for a given pair of currencies, the fact that this liquidity is only accessible to the users of that exchange excludes other users and in effect creates a liquidity silo.
- Popular currencies which are used by large populations e.g Euro, US Dollar and Japanese Yen are used by exchanges as quote currencies to offer liquidity. Minor currencies such as Canadian Dollars and Indian Rupees are largely ignored. Separately their markets are small, but collectively, their holders present an untapped source of liquidity that requires access into the world of cryptocurrency opportunities. Underserved Markets
The Worldbook works in the back-end to provide Liquidity .It is composed of
- Internal Order book, which is an order book that has all the orders placed on the Liquid platform’s order book after they are Foreign Exchange adjusted.
- External Aggregated Order Book. This orderbook contains all the orders aggregated from other liquidity sources other than those placed in the Liquids internal orderbook. The orderbook is linked to all the other exchanges and theorders are displayed after being FX adjusted.
Significance of the Worldbook
The wordbook eliminates fragmentation by providing a channel for undeserved markets and liquidity silos to access one global liquidity pool. In digital asset trading, the Base currency is the currency , asset or token you are selling, the quote currency is the currency in which the digital asset /currency you are selling is quantified in. Usually people prefer,the Quote currency to be in their native countries currency as it provides them with an easier comprehension of the quantified value.
On the Liquid platform, a user can chose the quote currency from a number of popular fiat currencies and a number of smaller ones. As the liquid platform grows, I expect support for even smaller currencies to be integrated into the system.
The worldbook architecture
🔸 The Matching Engine(ME)
The worldbook’s matching engine can process millions of transactions per second. The architecture of the Matching engine makes it highly scalable and it has the capacity to support a large number of existing markets(Crypto Token pairs) and new token pairs as they emerge. A robust order management system has also been incorporated to support a variety of order types.
🔸 Cross Currency Conversion Engine (CCCE)
The cross currency conversion engine works in real time to provide FX adjusted automated currency conversions. For example if two users place orders in the world book, one selling BTC but his quote currency is Euros, and another is buying BTC but her quote currency is in USD, an FX conversion of EURO/USD is added to the transaction to complete the match.
An innovative aspect of the CCCE is that it is not limited to Fiat. The currency conversion can be done between two cryptocurrency pairs for example BTC and ETH. This makes it possible to match a sell order placed in BTC/JPY to one a buy order placed in ETH/JPY. The ability to make FX adjusted fiat currency conversions and crypto to crypto conversions makes it possible to match a trade between USD/BTC buy order to a SGD/ETH sell order. The significance of which cannot be overemphasized.
🔸 Smart Order Routing (SOR)
The smart order routing technology bridges Liquid platforms worldbook and all the major exchanges in the world. It provides real-time feed from all liquidity sources by continuously checking for all the available orders in other exchanges and reflecting them on Liquids world book.
If an order is placed in the Internal wordbook and no match is available, the SOR technology will check if a match is available externally in another exchange. If a match is available, the order will be routed automatically to match the order in the currency of the other exchange.
The MMO and worldbook allow:
🔹 tight spreads
Spreads in the order book refers to the difference in prices between the highest buy order and the lowest sale order. The price spread is a measure of liquidity in market. If the price spread is low, then the market has greater liquidity.
- Currently internal World book is activated for Fiat pairs with Eth, BTC and BCH.
- In phase two the internal wordbook will be crypto agnostic and work for any crypto/crypto and fiat /crypto pairs
Liquid has had very tight spreads, some as low as 0.001USD ! I expect with the roll out of the External world book, the tight spreads will feature across all market pairs.
USD/XRP spread at $ 0.001
ETH/USD spread at $0.720, QASH/USD spread at $0.002 and BCH/USD spread at $2.636
🔹 fiat pairs
There is an emerging industry wide trend from cryptocurrency exchanges to exclusively feature fiat/crypto pairs or crypto/crypto pairs. Infact before the merger on September 4th, Quoine had two separate exchanges QRYPTOS(a crypto/crypto exchange) and QUIONEX(a fiat/crypto exchange) and therefore the QUIONE team have first hand experience on how this trend further compounds the liquidity problem by segregating markets. Imagine the inconvenience of making your trades on a crypto/cryptos exchange, then when the need arises to trade into fiat, you have to pay withdrawal fees to move your funds back to your wallet, the hassle of moving your funds over the blockchain to another Fiat/Cypto exchange or an online OTC platform.
After the successful merger, the Liquid platform boasts an impressive array of fiat/crypto and crypto/crypto pairings. As of writing this article, Fiat pairings are available in US dollars USD, Japanese Yen JPY, Singapore dollars SGD, Australian Dollars AUD, and Euro EUR.
The Cross Currency Conversion Engine (CCCE) works under the hood to facilitate real time Fx adjusted fiat currency conversions which makes the Liquid platform the go to exchange for crypto/fiat trades.
“Liquidity in crypto is fine now if you are only interested in Bitcoin, but if you are interested in all the 2,000 or so tokens out there, the liquidity gets low after the top 10. We aim to change this by aggregating orders into one order book.” Mike Kayamori, CEO QUIONE.
In an interesting debate on Reddit, a user implicitly criticized the entry of Institutional investors into cryptocurrencies citing their overly capitalistic tendencies to manipulate markets and absorb or eliminate rivals. This in its entirety goes against the principles of decentralization upon which blockchain tech and cryptocurrencies are built upon.
Yet for another user, their entry is a necessary evil; long term investments by institutional investors will provide the much needed volume for liquidity and lower price fluctuations in the market. I concur with this assessment, as a year long bear market in the cryptocurrency and Blockchain industry , has necessitated the need for the entry of institutional investors. But what are some of the factors that deter institutional investors from entering what has been termed as “the wild wild west?”
🔺 Custody and counter party risks
To highlight the risks of handing custody over funds to an exchange, the Mt Gox incident that resulted in the loss of 744 408 BTC and the later Bitfinex hack that lost 120, 000 BTC resulting in Bitfinex collaterizing the loss on its customers, there comes a great deal of risk in dealing with exchanges which scares way institutional investors.
Yet as per the Quione security update, which I highlighted in the earlier section, the Liquid platform security infrastructure and the Quione team financial management organization is solid by industry standards.
🔺 better trading venues; Speculation and Liquidity problems
For traders, price volatility is welcome, they thrive on it. Yet for alot of the time, speculation is based on FUD (fear, uncertainty and doubt)that arises from misinformation. This is a direct result of insufficient information in the cryptocurrency sphere. Poorly informed participants, coupled with inefficient markets contribute to crypto’s pumps and dumps which are a no go zone for institutional investors. To instill faith in cryptomarkets, there is need for conclusive market research and the dissemination of such information freely to the public.
The biggest challenge is liquidity, since Institutional investors wanting to make maybe a $100 million position would cause cause huge price swings which makes their entry into cryptocurency markets impractical. The Liquid platform is specifically built to address the market inefficiencies that result in poor liquidity. Once Liquid’s World book is fully rolled out, it will provides a a high level of liquidity that can support the level institutional investments without slippage.
As regards information dissemination, the QUIONE team has sent representatives around the globe particularly QUIONE CEO and Co-founder Mike Kayamori has been actively involved in international tours, blockchain summits as a blockchain evangelist and educator. Information sourced by Quione, including general information on cryptocurrencies is made publicly available on Quione’s blog and news channels.
For any information regarding the Liquid platform, you can visit https://help.liquid.com.
🔺 Regulation; Identity and Compliance requirements
For traditional investment houses, the pseudo anonymity advocated by crypto-evangelists is impractical. Being identifiable is a prerequisite for institutional investors as they are legally required to undergo audits to prove anti-money laundering compliance and to meet their legal obligations such as tax requirements. As such KYC (know your client) verification is a fundamental requirement that the Liquid platform uphold for all its customers. Liquid is also fully compliant with anti money laundering laws.
In America and Europe, at best, the sentiment towards cryptocurrencies are lukewarm. The American regulatory environment is gradually clearing up and many states allow exchanges and trading. The Internal Revenue Service (IRS) classifies cryptocurrencies as property and requires citizens to pay capital gains. The Securities and Exchange Commission (SEC) maintains that most cryptocurrencies fall under securities. Such regulatory uncertainties deter institutional investors from entering crypto.
The news in May 2018 that Goldman Sachs would establish a trading desk for Bitcoin derivatives heralded the entry of more institutional investors into cryptocurrency and marks a step in the right direction. Contextually, Switzerland and Japan have adopted a collaborative approach which recognizes the use cryptocurrencies and allows for crypto-exchanges to be registered by their regulatory bodies.
In order to address the pain points that deter entry of institutional investors into crypto, QUIONE packaged a suite of services that will smoothly on-ramp traditional investment channels into crypto.
🔹 Quione’s Prime brokerage
Backed by the worldbook, Quione prime brokerage encompasses a suite of services which provide clients with fiat management, credit facilities and direct market access. Essentially, Quione will minimize counter party risk by enabling users to transact with exchanges and other financial institutions without having to deal directly with them. Prime brokerage tackles the second aspect of liquidity problems that arises from the fear of traditional financial institutions to engage with cryptocurrencies because of regulatory uncertainties.
Benefits
- Reducing counterparty Risk, Users won’t need to open up accounts with multiple exchanges in order to access their services. All these trades will be available on the liquid platform , which will act saliently in the background and transact with the exchanges on their behalf.
- Fiat Management In an effort to address the difficulties of moving fiat, which is usually compounded by inefficiencies of cross border transactions ,Quione has therefore entered into working relationships with several international banks, in addition to co-locating their bank accounts with the same banks that other major exchanges use which will make it easier to transfer funds once the Worldbook partnerships are in effect.
- Fiat/ crypto Credit Users of the liquid platform can leverage their crypto tokens/ fiat balances to borrow money for better trading opportunities. More on lending margin trading is covered in the expert trading options.
Usecase example
The fear of trading bitcoins for Institutional investors is theft. Any institution looking to facilitate trading cryptocurrencies should have a way of storing the assets securely in a way that meets regulatory requirements.
Considering QUIONE’s regulatory compliance, QUIONE is registered in Japan and is licensed by the Japan Financial Services Agency (License 0002), and QUIONE’s solid security measures to guard against theft of digital assets, Financial institutions can leverage a partnership in which QUIONE provides custody services to trade cryptocurrencies like Etherium and cryptocurrency derivatives like Bitcoin futures.
The liquid team posing with their Japan Financial Services Agency Licence, source
“ By establishing best of bread technology for verifying our market participants and liquidity partners, we believe we are setting ourselves up for long run success. Mainstream finance which contains assets & liquidity far beyond what is currently availability in the cryptocurrency markets will come in to the space and we believe those institutions will want to provide liquidity to ecosystems that share our values of regulatory adherence and transparency.” Senior Vice President of Operations at Quione, Seth Melamed.
🔹 QUIONE API
An API (application programming interface) is a program that helps one software application interact with another. The Liquid platform includes an API that allows users to interact with its system and execute on the exchange. For security measures, withdrawals are disabled for APIs. API’s are useful in exploiting arbitrage opportunities, which in effect contribute to more liquidity in the market
In an Article on API trading in crypto, Alex Lielacher opines thus “This is particularly useful for traders who run algorithmic models on their own trading systems and want to receive live pricing and be able to execute trades — either manually or automatically through an algorithm — once their model generates a trading signal.”
Liquid platform maximizes on the popularity of Trading APIs among hedge funds and proprietary trading firms due to their preference for algorithmic trading programs. The use of APIs is bound to increase as the CRYPTO economy joins the global financial markets, as such having a secure and sophisticated API is bound to attract adoption from Institutional investors.
Quoine API provides a simple REST API to retrieve information about our markets and user data. Quoine provides access to two types of API consumer: * User API is recommended if you want to access your own account’s features, like creating an order. * App API is for accessing Quoine integrated features directly from your application.
To set up API visit https://developers.quoine.com/
LIQUID’S ICO CENTRE
“We make tomorrow today- the most profound advancements in human history take a similar pattern, it all starts with ideas, then those thoughts are put into action through experimentation and exploration; it is at these early formative stages that input is required to identify potential Gems, and polish them into projects that will positively impact the way we live. ICOs are an important part of the blockchain ecosystem. It is the process by which blockchain projects raise finances to fund their projects.
It is a long these lines that Quione goes beyond providing investment, exchange and digital asset management services in established digital assets and plays an important role in the incubation and funding of blockchain startups to promote the growth of blockchain ecosystem as a whole. This is largely made possible through Liquid’s ICO center.
The ICO center has remarkable advantages, it introduces accountability into ICOs, as the projects listed undergo thorough scrutiny by Quione’s to assess their legitimacy and authenticity. It also provides blockchain startups with a chance meet their crowdfunding needs by leveraging Liquid platforms infrastructure and user base, and Quione’s strategic partnerships to rope in investors. Ultimately, investors also get a chance to invest in reputable projects and discover hidden gems in the broad scope of ICOs listed under Liquids ICO centre.
Features of the ICO centre
- A softcap feature which refunds investors in case the softcap is not met
- Implementation of private sale lock up
- Enables ICO participation in USD payments
- USD settlements, this feature specifically allows ICOs to escape the financial management problems that arise from raising funds in crypto considering the price volatility and settlement problems when trying to cash out into fiat for development purposes of the project.
Users can now participate in ICOs with USD, and all ICOs can set a soft cap, increasing investor protection. From a token issuer perspective, Liquid allows the team to focus their time on development, instead of hosting a token sale.
XAYA, a blockchain based gaming platform ran its ICO through the Liquid platform. XAYA has a live blockchain with innovative games currently being developed.You can visit their website at https://xaya.io/ to lean more.
The QASH TOKEN
The QASH token is an ERC 20 utility token that acts as the the fuel of the liquid platform which provides holders with access to the services on the liquid platform.
- The QASH token can be used for trading against fiat
- The token can be used to participate in ICO’s on the Liquid platform
- QASH is also used for both margin trading and lending.
QASH loan offers, available to margin traders on Liquid.
The QASH token is also used to reward ecological contributions such as completion of assignments e.g through ambassador programs, and to incentivize adoption through Airdrops to QASH holders.
Most importantly, holding QASH tokens grants voting rights on community issues such as the choice of projects to be included on the liquid platform. QASH holders will also enjoy access to the benefits that arise from QUIONE and Liquid platform’s partnerships.
On an AMA (ask me anything) on reddit, Quione’s Chief Strategy Officer Ray Hennessey clarified certain aspects about the QASH token.
RH: No coin burning! We do not intend to burn currencies! There will also be no dividends as QASH is not a stock. QASH will offer perpetual 5% discount when used as a settlement currency on the platform.
I believe no coin burning is in line with upholding transparency unlike the trend in which cryptocurrencies are burnt or “printed” to manipulate market prices. Exchange tokens have proven to be quite resilient even in the bear market, as the constant demand for exchange services drives their utility. Currently the QASH token trades at 0.22 USD and is available on a number of exchanges including Exx, Huobi, GateIo and Idex and on its native platform Liquid. Counting on the unique value proposition of the Liquid platform, with a core focus on solving the liquidity problem of cryptocurrency markets, I expect the QASH token to increase in price spurred by an increased adoption from more retail traders who seek liquidity and convenience, and the on-ramp of traditional financial institutions through prime brokerage.
Future Updates
The Liquid community is eagerly awaiting the following updates to be rolled out soon:
- The most important update awaited is the roll out of the External world book.
- The Liquid Distributed Ledger(LDL) is to be launched in 2019 offering tailored blockchain solutions for the financial market and to provide utility for the QASH token, which is to re-branded to the Liquid token. Watch this video in which Mike Kayamori explains the necessity of the LDL here.
- Partnership announcements with other exchanges for the External World book
- Direct bank deposits
- An Updated roadmap
- Liquid will also have a banking license next year.
Present Concerns
The most prominent concern in the Liquid Users community is the long withdrawal times owing to the security measures adopted by QUIONE such as 100% cold storage. Sometimes users who may need to withdraw their funds urgently. An example scenario is when a Token not listed on the Liquid platform starts to “pump”(appreciate in value) and users need to capitalize on the momentum of the coin by withdrawing their money from the Liquid exchange to buy the token in a different exchange.
In my opinion, these concerns are quite valid. But they are short term problems which will be entirely solved once the full features of the Liquid platform is rolled out. Once the external order book is in place, Liquid platform users will be able to make trades on multiple exchanges through the World book.
Take Away
For the better part of this year, crypto markets have been waiting on positive SEC rulings on exchange-traded fund (ETF) applications with the delay/denials on approvals mainly attributed to market manipulations. In an news article, US Attorney General Barbara Underwood is quoted as saying, “As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges.”
By standards of digital asset exchanges, the Liquid platform and the QUIONE team have put up institutional-grade services with firm focus on security of user funds, KYC (know your client) and Anti money laundering compliance. Additionally, to ensure fairness and integrity, QUIONE is independently audited by a top 4 international audit firm, Deloitte.
In line with providing financial services to all, for the retail investor, Liquid’s easy to use features accommodates beginners and provides intuitive expert options for Veteran traders.
In the details, Liquid platforms value proposition is quite vast, and it will take a substantial amount of time and increased adoption/partnerships to truly realize the vision behind the project. The ultimate goal is to work closely with regulators and expand globally, and help cryptocurrency go mainstream. In this respect, the launch of the Liquid platform has laid a firm foundation in the right direction. The future is indeed Liquid.
HIGHLIGHTS
- By combining the order books of exchanges from around the world, the QUOINE LIQUID platform’s Worldbook works to provide a single liquidity pool which ensures that retail and institutional investors have an easy time converting fiat to any cryptocurrency and vice versa
- Prime brokerage tackles the second aspect of liquidity problems that arises from the fear of traditional financial institutions to engage with cryptocurrencies because of regulatory uncertainties.
Ultimately, the goal of blockchain technology is to achieve decentralization and democratic access. Since most blockchain startups issue tokens as a representation of the digital value they create in a form which is democratically accessible and securely transferable, they require the services of digital asset exchanges to facilitate the transfer of ownership of the tokens between entities globally. Presently, this function is hindered by the disconnect between traditional financial markets and the crypto token economy. The Liquid platform acts as the bridge between the traditional financial markets and the new crypto token economy and therefore has the greatest value proposition in helping cryptocurrencies go mainstream. As such, listing and trading on the Liquid platform is a sure way of driving your token utility by tapping into the liquidity of its globally sourced markets.
Be Liquid ! Discover new opportunities by registering on the Liquid platform here.