LIQNET - Cryptocurrency Liquidity Exchange Network Trading
Vladyslav Antonov
LIQNET is a cryptoexchange that aggregates liquidity from various platforms thus solving the problem of the splitting of users and their trading orders by forming a unified order book with the best market depth and prices. In simple words: LIQNET is a cryptocurrency exchange that aggregates liquidity from different exchanges across the internet. For example a sell order for a certain cryptocurrency may be placed on one exchange and a buy order may be placed on another exchange.Its main goal is to reduce the bid/ask spread, while provide the highest liquidity across multiple order types and markets.
ICO information:
Token symbol:LEN
Standard:ERC20
Maximum number of tokens:63 746 032
Current stage: Pre-sale
Pre-sale bonus: 100%
Price of one LEN token:$1 (100% BONUS)
Soft cap: 20 000 000 USD
Hard cap: 50 000 000 USD
Payment methods:ETH, BTC, BCH, ZEC, LTC, XRP, Waves, USD
Time frame: Pre-sale ends in 3 days!
Strong sides
- Working product: https://liqnet.com/ is publicly available web terminal
- Platform allows to set TAKE PROFIT and STOP LOSS orders
- Fully functional iOS and Android trading apps are planning for 2018
- Limited token supply: 63 746 032 LEN
- Pre-ICO bonus is still available (100% BONUS!)
- Minimized spreads,
- Token holders have some advantages on exchange: they can purchase a discount on fees: one token gives a 0,5% discount on the sum of fees for one day.
- Solid business model: The projected daily trading volume of the LIQNET platform is $200 million, then with an average commission of 0.15% (taker = 0.1%, maker 0.2%), the planned net profit is of $0.4 million a day.
- Physical hardware is located in two different datacenters :France and Canada
- The company is registered in Singapore
- LIQNET has a suite of analysis tools for traders.
- High liquidity allows users to reduce or fully eliminate the costs of slippage.
- 93% of tokens are for sale during ICO period
Weak sides:
- Exchanges face various legal barriers in many countries
- Takes long time for exchange to earn reputation and form loyal customer community
- 100% bonus for pre-ICO participants might scare away potential buyers during main sale
- Little information about the team
- Absence of significant partners in blockchain market
- Small advisory board
- Project is not hyped at all, community is not formed yet
- Token has additional risks associated with Ethereum platform as it uses ERC-20 token
Conclusion: This project has good potential if you participate in pre-ICO, since 100% bonus will give you significant advantage over those who will buy token during main sale period. I like that product is already available for public and can be used. There are several risk factors that you have to consider: all exchanges are subject of regulations and sometimes they face serious legal barriers. This project doesn’t have any hype and support from another large projects yet. Liqnet takes specific niche as it solves specific trading problem. LIQNET is capable of aggregating liquidity from different exchanges across the internet, therefore it can reduce the bid/ask spread and fees/costs. While the project has numerous advantages, it might take a time before Liqnet exchange will get significant customer base. I like appreciation token model as it might attract long and short-term investors. If you want to know more about the project I recommend to visit:
Interview with the team
(Q): Vast majority of people joined crypto space in 2017. Some of them might not be familiar with trading terminology such as “ bid/ask spread” etc. How would you explain the basic concept of your project in simple words? Please, provide at least one, real-life example
(A): The principle of work of the LIQNET exchange with a mechanism for collecting liquidity is that applications from different exchanges are combined into a single market on our platform. It gives any user the best conditions for trading in one place. For example a sell order for a certain cryptocurrency may be placed on one exchange and a buy order may be placed on another exchange. These orders can be fulfilled on the LIQNET platform. All the possibilities in one place.
As you can see the concept of LIQNET is easy to understand even without terminology, though any trader needs to know it for the successful trading. By the way, we put a short glossary of terms right in our White Paper so that people from other spheres can join the project.
(Q): How do you plan to form community and customer base around your project?
(A): The main tool for forming a community around LIQNET is certainly the LEN token. Its owners will receive trade discounts, so they will form a closed club of preferred traders. They will be able to communicate with each other in chat rooms and forums, both ours, open to ICO, and in their own. We will listen attentively to the opinions expressed and try to improve the exchange on a daily basis. We are sure that the feedback and attention to the client is the guarantee of fruitful cooperation.
To draw attention to the project we publish news about the achievements of LIQNET, articles on stock exchange trading. We are pleased to accept the help of experienced advisors inspired by the idea of the project. Naturally there is a global advertising activity, brand advocates, conferences, exhibitions, meetings. But all these are secondary to the quality of the product.
If the exchange is of high quality it always has customers. We work above quality. You can evaluate the results of our work on liqnet.com.
(Q): What’s your marketing strategy?
(A): The first stage is the story of the product, the formation of knowledge about it, audience's acquaintance with the team. At this stage we are engaged in posting publications about the product and the team in the media.
The second stage is testing the product and building trust in the company and the product. With the help of various advertising channels users are invited to the exchange to test the product (press releases in specialized publications, Telegram channels, mailings to traders' database). The emphasis is made on the experienced traders. A plan for improving the product is formed based on the feedback from experienced traders and the community, a decision about the product readiness to enter the ICO is made then.
The third stage is PreICO and ICO.
At this stage we are using the media to announce the ICO and invite everyone to participate in it. We publish announcements through specialized Telegram channels, make video reviews of the product and ICO, distribute them on YouTube, send mailings to investors. On the leading crypto platforms there is banner advertising and retargeting to the interested audience, and our representatives participate in the road show around the world. Particular attention is paid to communication with the investment funds.
In the advertising strategy we emphasize that LIQNET already has a finished product, it can be tested and verified that it works. The money in the ICO is not collected for the idea but for the support and development of a truly working product.
(Q): What makes you think that you are competent enough to run such a web terminal?
(A): We do not feed promises, our product is already up and running in normal mode at liqnet.com. Getting familiar with the platform and its capabilities users can assess the level of competence of the LIQNET team.
In addition, the team LIQNET boasts years of experience in the stock market and the cryptocurrency market, both in terms of trading strategies and in the development of software products. You can meet all key team members on the website liqnet.io. Following the links you will find our profiles on LinkedIn - there is even more information, it is up-to-date. Add us in friends!
(Q): Could you tell us more about your business model and your revenue formation? What’s your planned revenue for 2019?
(A): The prognostic value of income depends very much on the current rates of cryptocurrencies and total market capitalization. Our White Paper shows the calculation of the economic model as of the end of 2017. We took the average value of trading volume in the 9 largest exchanges and calculated the net profit of the exchange depending on the size of the commission.
At that time the average BTC rate was 15,000 USD. Thus, if we adjust the calculations for the current BTC exchange rate and the trading volumes of the 10 largest exchanges, the projected daily trading volume of the LIQNET platform is $200 million, then with an average commission of 0.15% (taker = 0.1%, maker 0.2%), the planned net profit is of $0.4 million a day.
The share of positions from third-party sites in this model is 20%. We plan to enter the list of the ten largest exchanges in terms of trading volume for 1.5 years.
Also in White Paper there is the calculation of the intermediate scenario of the platform development for the volume of trading $11.5 million per day and the share of positions from external sites of 70%. In this case the projected profit will be $34,000.
(Q) Do you have any expansion plans and how do you plan to scale your project?
(A) First of all, after the ICO the holders of the tokens will vote for the trading pairs to be added to the trades. This is an important point both for expanding trade and for improving the product through the feedback and work with the community. LIQNET also plans to connect more platforms to provide more liquidity for all trading pairs.
LIQNET will enter each regional market individually, open representative offices or obtain licenses if necessary to operate in a particular jurisdiction such as in Japan.
(Q) Do you plan to sign any partnerships or get more advisers on your board in the nearest future?
(A) Of course. Right now we are concluding several partnership agreements and in the near future we will publish details of these agreements. We also supplement the team of advisors with people who has a lot of trading experience to get high-quality feedback and further advancement of the platform. Both directions of activity are reflected in our plan for business development.
(Q): Since you offer 100% bonus for pre-ICO participants, that might scare away main-sale participants. How do you plan to convince people to participate in main sale?
(A): During PreICO we sell a very small fraction of the total number of tokens - 0.94%. The bulk of the tokens will be distributed during the ICO period, so the pre-sale has only positive aspects for tokens buyers. This is an exclusively motivational moment - they have time for the maximum bonus which is calculated depending on the amount:
when buying tokens a total of up to $10,000 - 60% bonus;
when buying tokens a total of $10,001 to $49,999 - 80% bonus;
when buying tokens a total of $50 000 incl. - 100% bonus.
The ICO will have its bonuses, and the benefits of tokens outweigh the costs of their purchase.
(Q): What traffic volume your terminal can handle at the current stage?
(A): According to the load tests on the current infrastructure the trading core supports the simultaneous operation of approximately 4,000 users and 5,000 orders per second per trading pair. We believe that at this stage this is more than enough. When testing the trading core on a laboratory bench (using leased powerful equipment and a broader communication channel), we obtained a result of 100,000 orders per second with 100,000 connected users. LIQNET meets the stringent requirements for the load and scalability of the current infrastructure.
(Q): Does LIQNET token have any appreciation model?
(A): Yes, we conducted the assessment and calculation. Our experts give a forecast for the three scenarios. The results are described in detail in White Paper in the section Project's Economics.
We calculated the cost of obtaining discounts depending on the volume of trading on several large sites and took the average value from the values obtained. But the project is new, therefore, to increase the attractiveness we have made discounting from the received value 10 times. Thus to get the same discount on another site you need to pay the commission for the previous month 10 times more than you pay by tokens to us, and with participation in PreICO - 20 times less
(Q) - Thank you for your time:
(A) - You are welcome
Links:
Analysis was prepared by Vladyslav Antonov