Part 2: Value of QRX Token for the Decentralized Qurrex Exchange Segment
In the last post we talked about how the Qurrex token will be used in the centralized segment of the hybrid crypto exchange (CEX). Now let’s talk about what role the token will fulfill in the decentralized segment (DEX).
The idea this segment of exchange is based on will help resolve the main issue of up-to-date decentralized crypto exchanges — full or partial lack of trade volumes. Currently the mutual volume of all decentralized exchanges does not exceed $10 billion per day, which is less than 0.1% of daily crypto market turnover. And if we consider liquid cryptocurrency pairs (e.g. ETH/BTC), the actual fraction will be even several times less than that.
The problem here is related to economy, rather than technology. The issue now is that there is almost no incentive for the liquidity providers to participate in the organization of trading by means of providing the liquidity. This issue can be solved, the developers of the decentralized Qurrex exchange designed the so-called liquidity node, which is a truncated type of an exchange, and its functionality allows drafting a request register and drawing up the balance.
There are three ways for the liquidity node owner to make profit:
- Inside the network;
- By means of provision of own liquidity for an exchange commission fee and management of the client’s passive liquidity outside the network;
- Commission fees for provision of leverages, repo, access to the system and other services.
Decentralized Qurrex system structure can include thousands of liquidity nodes. Liquidity providers will be earning significantly big amounts of money — from several hundred thousand dollars up to several dozens of million dollars a year — if the work actively.
The earnings of an average broker with 10,000 users can be estimated as $6-$12 million dollars a year.
Liquidity Providers
Banks, financial institutions, prime brokers, and market makers fulfill the role of liquidity providers required for the exchange market operation. The above is true for the conventional markets. In the crypto economy the liquidity providers are major miners and mining pools, as well as the owners of significant amounts of bitcoins and altcoins.
Qurrex features creation of own liquidity node. But one can acquire the right to create it only in return to the exchange’s tokens, and the cost is calculated by the formula:The main value of QRX token in this case is the possibility to get active and passive kinds of income in return to possession of a liquidity node. The demand will be provided from both institutional participants and major miners, mining pools, owners of big amounts of cryptocurrencies. The maximum amount of liquidity nodes owners is limited to several thousand exchange users.
Trading Terminal and QRX Token
A trading terminal (middleware) will be made available for the use at the exchange. It will provide B2C model trading services. Socialized traders — owners of small exchange’s token amounts — can get access to these services at a discount or, in some cases, even free of charge. The owners of medium and major Qurrex token amounts will have discounted access to B2B services as well. Market data with a breakdown by indicators is an example of such service.
We shall say that prior to pre-sale completion it will be impossible to buy QRX tokens at retail. Pre-ICO is expected to be over in May-June, 2018, and a relatively small amount of tokens will be provided to public sale. QRX tokens will be available for purchase via a white-list with the use of an already launched depositary system.
One QRX cost is $1 or an equivalent in cryptocurrency at the time of trading. Tokens can be purchased using Ethereum, Bitcoins, or Litecoins. Total amount to be sold during ICO is 55 million tokens out of 70 million. So, 78.6% of total amount of coins will be available at the market.