The future of Finance is distributed.
Democratization of Finance has begun.
The power is in everyone’s hands.
The Crypto economy is here.

~ QUOINE TEAM

In the last article, we were introduced to QUOINE and their newly launched trading platform LIQUID.

LIQUID will be a "globally sourced platform(World Book) trading platform with an associate suite of services(Prime Brokerage)". _Whitepaper

LIQUID will function as a global highly liquid order book linked to all the major exchanges from which any user can trade and make an exchange.

_{Quoine Liquid Platform}

First off, let's look at the word LIQUID.

What does it mean in crypto terms?

To be Liquid or to have liquidity in the crypto space means to be available in circulation. The last thing any trader wants is to sign up on an exchange, send in his/her fiat or BTC/ETH only to be unable to make a trade for their desired crypto because no one is selling.

Liquidity varies from place to place and also depends on time as we have peak trading periods and low trading periods. Each exchange functions inside its own universe and the market forces within that particular exchange determine price. That is why sometimes you see a coin trading for different values in different exchanges.

_{Liquidity Variation Across Exchanges}

LIQUID solves that little issue by connecting you to OTHER exchanges as well. That way if you wanted to trade let's say Bitcoin for coin XYZ on exchange 1 but it has no activity or XYZ in its sell book, the LIQUID Multi Market Order Book automatically links your buy order with a sell order from exchange 2 that has an XYZ for sale.

Individually each exchange has small holdings(silo). But when they all link together they form a large almost infinite source of flow. Think swimming pools and oceans. LIQUID aims to connect and create a global network of exchanges and make them accessible to everyone.

_{Liquidity Silos and Exchanges}

The LIQUID Platform is divided into Two main parts.

1. World Book
2. Prime Brokerage

Under the World Book we have different mechanisms such as

1. Multi Market Order Book
2. Matching Engine (ME)
3. Cross Currency Conversion Engine (CCCE)
4. Smart Order Routing (SOR)

MULTI MARKET ORDER BOOK

The World Book is basically the part in charge of matching customer trade orders. By linking across exchanges it can systematically arrange matching orders and align trade prices across exchanges. This is done using the Multi Market Order Book.

_{Liquid Multi Market Order Book}

The use of the World Book solves the problem of Liquidity Silos and Underserved Markets.

Liquidity Silo - When an exchange holds a lot of a token but there is little activity (E.g. no one is buying or few buy orders).

Underserved Market - When an exchange has very little amount of a particular token that many people are interested in buying.

The Multi Market Order book links exchanges that have excess demands to exchanges that have adequate supply in order to allow free-flow and circulation of cryptocurrencies. This will also allow orders to be placed in the currencies of the Trader/Investor's choice.

The World Book is made up of two order books:

Internal Order Book: This is the order book of the particular exchange you are using

External Aggregated Order Book: This is the combined order books of all the other exchanges on the LIQUID platform (apart from yours). Each order in this book is linked to an order on the various exchanges worldwide.

_{Liquid World Book}

The LIQUID Platform’s World Book supports trading in the quote currency of one’s choice. All trading pairs have two types of Currency.

Base Currency - The particular crypto currency you are buying e.g. STEEM, Bitcoin, Qash, etc.

Quote Currency - The fiat price equivalent you see e.g. USD, EUR, Naira, etc.

So you will have something like this-> BTC/USD

In the course of trading it is also common to have both currencies in crypto. E.g. Qash/BTC where Qash is the Base currency and BTC is now used as the quote currency. Traders using the World Book have the option of selecting their Quote Currency from any of the major fiat currencies, in addition to some major cryptos.

USER CASE SCENARIO

John is an American who wishes to sell 5 Bitcoin for USD($). He places his sell order on Exchange A.

Currency Pair = BTC/USD. The Quote currency is USD

John will see his sell order listed on the order book under his quote currency list

Mandy is from Singapore looking to buy 5 Bitcoin with her country's currency Singapore Dollar(SGD).

Currency pair BTC/SGD The Quote currency is SGD

Mandy will equally see her buy order listed on the BTC/SGD order book

These orders however are matched. What will happen is a behind the scenes Forex conversion from Buyer currency(SGD) to seller currency(USD). Both parties will then receive their transactions in their respective selected currencies. That is John will receive USD and Mandy will receive Bitcoin. Transaction concluded.

_{Liquid Multi Market Order}

In the next article we shall discuss the Architecture of the LIQUID Platform's World Book and the mechanism that carries out its Forex exchange.

If you would like to learn more about this lovely project you can join their telegram group, or follow any of their social media accounts

Telegram | Twitter | Facebook | Instagram | Medium

LIQUID also has its own dedicated channels through which you can better connect and participate within the community.
Liquid Telegram | Liquid Twitter | Liquid Facebook | Liquid Steemit | Liquid Instagram | Liquid Youtube | Liquid LinkedIn | Liquid Reddit

You can also visit any of these links for interesting information about the project

Project Website: https://quoine.com/#products

Products & Services: https://www.liquid.com

Project Token: https://coinmarketcap.com/currencies/qash/

Quoine Team: https://quoine.com/#mission

RELATED ARTICLES

https://www.investinblockchain.com/liquid-platform-launch/

https://www.businessinsider.sg/daostack-announces-new-gen-exchange-listing-on-liquid-by-quoine-2/

https://bitcoinexchangeguide.com/liquid-by-quoine-launches-as-new-crypto-trading-platform-for-liquidity/

https://www.prnewswire.com/news-releases/official-launch-of-liquid-a-new-crypto-platform-opening-up-liquidity-for-crypto-markets-worldwide-300708732.html

https://bitcoinexchangeguide.com/xaya-decentralized-blockchain-gaming-platform-picks-liquid-exchange-to-host-ico-token-sale/

https://bitcoinexchangeguide.com/quoine-crypto-companys-liquid-ico-platform-adds-new-features/

DISCLAIMER: The information contained within this post shall not be taken as financial advice. I am not a financial advisor and none of your investing should be carried out based on any information presented here. You can lose all of your money by not investing wisely. The above information is for educational and entertainment purposes only. Kindly Endeavor to DO YOUR OWN RESEARCH.

Image Credits - All images were derived from the LIQUID whitepaper.