Introduction
Since introduction of bitcoin in 2009 till recently, a lot of cryptocurrencies has been introduced, some of which were successful and some of which were a failure. This boom has led to the emergence of many different crypto exchanges where crypto investors or traders participate to execute various trades.
However, these investors lack the necessary tools to enable them execute trades and manage their risks. To execute trades in the crypto market currently poses a number of challenges of varying complexity to investors or traders. These challenges ranges from the fragmentation of the crypto market, unreliable trade execution, lack of security and lack of reporting and compliance.
What is Caspian?
Caspian is a platform that provides/equips investors or traders with the necessary and financial tools to execute trades and manage their risks. It would aid in eliminating the challenges faced in the current crypto exchange market, thereby enhancing further participation of individuals and corporations in crypto-trading operations.
With the boom in cryptocurrencies, many individuals have resorted to the use of different crypto financial tools to analyze markets and carry out trading activities. However, with the Caspian platform compliance unification and reporting functionality users would be able to analyze all of their trades in one place; regardless of which exchange they trade in.
According to the whitepaper Caspian would equip investors with a comprehensive Order and Execution Management System (OEMS), Position Management System (PMS), and Risk Management System (RMS), backed by experienced support team.
In the Caspian ecosystem crypto prices, market graphs, buy and sell orders. All these information from different exchanges are presented using a single user friendly interface on the platform.
The Caspian platform benefits are grouped into the following categories
Caspian execution system
The execution system is responsible for executing most of the basic tasks in the platform. The tasks carried out by the execution system include the following
OEMS (Order Execution Management System)
The OEMS acts as the main hub for traders and it provides a single user friendly interface that provides traders access to major different crypto exchanges as well as APIs that providers traders access to set buy and sell orders, receive information on price and other information.
In addition, with the help of OEMS traders have the ability to view prices of different crypto assets on different exchanges and also the ability to stage, send and amend orders in different ways.
Furthermore, traders can stage order intentions as parent orders, perform margin trading across different crypto exchanges, ability to send messages in case of a compliance breach, presence of alert features for users to adjust their trades to the current market condition and the ability of an organization to assign different roles to its members.
SOR (Smart Order Router)
The SOR enables users to view different exchanges as a single pool of liquidity. Once a user sets a sell and buy order, the SOR executes the objective and it does it in such a way that it gives priority to the price, liquidity and commission in relation to the different major crypto exchanges so as to achieve the best outcome.
Algorithms
Once a trader sets a buy/sell order, each order gets assigned to a particular algorithm which can route slices across different exchanges. The trader has control over the behavior of the algorithm and can monitor the performance throughout its specified time.
User-built Strategies
Traders can define the strategy to employ while managing their orders through this feature. Users can either set a rule for an order to execute once there is a decrease or increase in the price of their asset within specified period of time.
Alerts
Unlike the traditional financial tools, traders using the Caspian platform can define conditions under which they receive alerts about the market or their assets. The alerts can either appear in form of pop-ups or delivered as an email.
Caspian Position and Risk Management System
Traders often find it difficult to manage their positions and manage risks in the crypto market. In the Caspian ecosystem, through the PMS and RMS users can be able to monitor their positions, monitor their profits/losses and as well be able to maintain detailed records of each. Traders can be able to track and record data of their trades both current and historical data.
Another function of the system is reconciliation. Just as in the case of traditional finance in an organization where multiple parties reconcile and agree that a transaction has been carried out as agreed. Caspian ensures that the traders positions/transactions are reconciled across the different major exchanges.
Caspian Compliance and Reporting Sytem
Compliance Engine
The compliance engine enables users to set limits and rules covering the pre-trade and post-trade scenario.
In the pre-trade limit the user set the limit to delay order execution until the compliant checks are complete. The pre-trade limit has three levels to the limits
- Warning limit: it warns the user about an order that does not match the compliance and it can be overridden by the user.
- Approval limit: in this limit, the order placed by the user has to be approved by a supervisor before it can be sent to the market
- Absolute limit: once the order gets approved and sent to the market, it cannot be overridden by any means. The order is now absolute.
Reporting engine
The reporting engine would provide report features to the user. The reports can either be snapshots reports, compliance reports and audit reports.
The Caspian team are also working on a reporting engine that would also allow users to design report templates and as well users can be able to schedule and receive graphical reports in form of PDF, Excel or PowerPoint.
With the help of the reporting engine, users can be able to view “web based visualizations, amendment of the visualizations in real time and save the amended visualizations as a new report which can be sent as a file.”
Traders/users do not need to visit different exchanges for data execution, information and prices. The Data can be imported from various exchanges through Caspian protocols and APIs and focus it into a single portal for users.
Impact in the crypto industry
The crypto industry is a profitable venture and its still growing. Many individuals and organizations have ventured into these industry, some have lost quite a fortune due to lack of necessary financial tools to help conduct their trades and manage their risks. These lack of financial tools has contributed to the low adoption of cryptocurrency by individuals/organizations.
Caspian would impact positively to the crypto industry. It would simplify the way traders/investors manage their assets. Unlike when individuals sought for different financial tools to achieve good results, all the financial tools are now available in one platform with access to different exchanges. It would also minimize the amount of time users spend to analyze different markets before trading. Every analysis can be done on the Caspian platform without hassle and with the necessary tools to reap profit from the market.
Token Ecosystem
Caspian token (CSP) is the currency being used in the Caspian platform. It is an ERC-20 token built on the Ethereum blockchain. The token is not a necessary requirement to access the platform but can be used by the user to enhance their experience and a variety of benefits.
The token can be used as incentive to developers that develop 3rd party Apps on the platform thereby enhancing the features and functionality of the platform.
Use cases
Dontador is a guy interested in investing in cryptocurrencies. He has knowledge on how to analyze the markets but he doesn’t know how to manage his assets and how to reduce the risk. He decides to invest in Steem but the price on each exchange is different and he wants to split his order to small orders on these exchanges.
Fortunately, he encounters Caspian and likes the features on the platform and how he can analyze different markets of different exchanges on single platform. He signs up and spreads his capital to small orders on different exchanges so as to reap benefit at the end.
Conclusion
The current crypto exchange system is too fragmented, lacks trade execution, lack of security and lack of reporting/compliance. Individuals/organizations due to lack of efficient financial tools have been stalling to participate in the current crypto era. Many have lost fortunes and some were discouraged from investing due to the current state of the crypto industry. The Caspian platform was created to address these limitations and it would lead to adoption of cryptocurrency globally.
Roadmap
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