Bottle Neck of the Crypto Space: Liquidity
Quoine Liquid Platform hopes to solve the biggest and perhaps the most over looked bottle neck for growth in the cyrptocurrency space. Liquidity in the context of the crypto space refers to the extent at which the market allows assets to be bought and sold at a stable price. The average market participant at the moment will lose out or gain 1-10% per transaction depending on their market timing. There’s only about 350 million in the crytpo market in total, the forex market alone has 10 trillion. This is why you see low volatility in the forex market and high volatility in the crypto market. Great from a speculative stand point, or if your an algorithmic trader but no so good for transactional use. In other words using it for goods and services. Additionally, companies in the space need liquidity to cover every day capital requirements to run a business and also for financing innovation. This could lead insolvency issues if the company fails to raise funds fast enough. Currently in the fiat world the biggest liquidity providers are large banks. Quoine hopes to take over this role in the crypto economy.
Quoines Answer
Quoine will offer two products/services using proprietary technologies. The world book will be an additional layer on top of the Quiones existing Matching Engine, Smart Order Routing, and Cross Currency Conversion Engine technologies. This will essentially consolidate all the orders on the various crypto exchanges into one global world book and would be accessible through the Liquid platform. The second will be the Prime Brokerage that will offer users fiat support, direct market access, and real time reporting.
World Book
Quoine believes the World Book will solve two issues limiting liquidity in the crypto economy. First being liquidity silos, which exists because each exchange offers a crypto-fiat pair in its local currency. Moreover, these pairs can't access liquidity in a different exchanges, since they can only be bought and sold on one exchange. This effectively creates liquidity silos which results in different prices for the same token across the various exchanges. Secondly, underserved markets are isolated because they're not financially large enough to support their own crypto token. A World Order book would give them access to the global pool of liquidity. This means even a small exchange in a remote country could theoretically gain access to massive amounts of liquidity immediately.
The following technologies currently being used and tested by Quoine and will allow for the World Book to operate efficiently and scale to a large user base;
- Matching Engine
- Cross Currency Conversion Engine
- Smart Order Routing
Rather than going over the technical detail I'll sum up what this tech will allow users to do. Once Quoine aggregates all forex orders and crypto orders into the World Book, users will have a central point to trade between the various exchanges in the currency of their choosing. This will make it possible for the following to take place. An American trader can sell BTC and receive USD to a Chinese trader who buys it in Yuan. This is possible because under the hood the World Book is allowing for a forex conversion to happen. Additionally, the World Book will allow for unconventional liquidity sourcing. The diagram below shows how Client A can sell ETH fixed in EUR to Client B who places an order to buy BTC at a price fixed in SGD.
Prime Brokerage
Quoine will offer a platform for users to trade cryptos across all partnered exchanges without having to open numerous accounts. This will reduce counterparty risk because users will only have to deal with Quoine which happens to be licensed by Japan's Financial Services Agency (FSA). The FSA is a governmental regulatory body that oversees banking, securities and exchange, and insurance sectors in Japan.
Also, Quoine will deploy Smart Order Routing, allowing users to get fast and direct access to all cryptos traded on partnered exchanges. The Order Management System and Matching Engine are the underpinning technologies allowing for millions of orders to be processed in a second.
Fiat integration and support is a big focus because it allows for increased liquidity and encourages partnerships with crypto to crypto exchanges. Since its inception, Quoine has been working diligently to build a network of relationships with the large banks. The have tentative plans to locate their bank account and the accounts of other large exchanges into the same bank. Pending the success of this endeavor, they will than attempt to transfer fiat globally after obtaining a Funds Transfer Service Provider License.
Lastly, they will offer credit services allowing users to leverage their purchasing power to maximize their gains. The service will also allow users to borrow funds using Crypto Tokens as collateral. Their roadmap indicates a fully banking license could be obtained early as Q3 of 2019.
Qash Token
Quoine recently hosted a very successful ICO with 350 million raised. The token can be used to access services on the Liquid platform and to trade on the open market. They will provide more specifics on utility but you could potentially use the token to make loans or utilize as gas once the exchanges become decentralized. Some benefits of holding the token will include periodic promotions, discounted fees, preferential access to new products, and opportunities to invest in future ICO/Token Sales on the Lidquid platform. The following outlines the token allocation plan and reveals how tokens proceeds will be used.
Team
Quoine has a very seasoned team consisting of individuals who have worked at large and very reputable companies. Goldman Sachs, BOA, Barclays, Bloomberg, Samsung, Softbank Group, and Mitsubishi Corporation to name a few. Quoines team is lead by Co Founder and CEO Kariya Mike Kayamor who graduated from University of Tokyo with a BA in law and than went on to get a MBA from Harvard. He's worked in finance his entire life in prominent positions and worked as Chief Investment Officer at HungHo Asia Pacific before starting up Quoine. His Co Founder Mario Gomez Lozada is also heavy weight in his own right. He graduated from Univeristy of Kansas where he got his MS. His more notable roles include Chief Information Officer at major banking institutions and in total has over 15 years of banking and IT experience. This dyanmic duo has lead the Quoine to be one few crypto platforms which has been successful in opening bank accounts in numerous countries. Mind you in an era where banking institutions have an unfriendly posture towards the crypto space. You defintely want to keep an eye on this team, they look like a disruptive bunch.