Qredo launch Liquidity Hub for peer-to-peer digital asset trading

August 25, 2021 - Decentralized digital asset infrastructure provider Qredo is releasing the open public beta of Liquidity Hub, a public forum purpose-built for financial institutions to trade via cross-chain atomic swaps. Traders can make swaps over-the-counter between different cryptoassets — such as bitcoin and ether — without needing to trust third parties, custodians, or complex mechanisms such as wraps and pegs.

Traders can now officially start experimenting with peer-to-peer transactions that allow control of assets to be retained at all times, and enjoy multiple benefits by trading directly from within their Qredo Wallet:

  • Instant no risk settlement. Qredo's unique cross-chain atomic swap architecture means funds settle simultaneously to each wallet, with no risk of either counterparty failing to honour the trade.

  • Inbuilt digital asset governance and reporting. Institutions can meet compliance obligations and customise their custodial governance and approval workflows.

  • Range of cryptoassets. The Liquidity Hub currently supports BTC, ETH and multiple ERC-20 tokens. Liquidity will be supported by Qredo investors and crypto market makers, including Wintermute Trading.

  • Economical fees. Trades on Liquidity Hub are charged at 0.5 BPS (0.005%) for Maker and Taker, lower than the 30 BPS fees on DEXs such as Uniswap, and the 10 BPS typically charged by centralised exchanges. There are no gas or mining costs, allowing for unrestricted and free flowing trades.

  • Best execution. Slippage is impossible, even for those looking to swap large amounts of cryptoassets in a single trade.

In a blog-post that supports the announcement of the Liquidity Hub, Anthony Foy, CEO of Qredo, states that the bulk of digital asset trading is taking place not via exchangers, but over-the-counter (OTC): "This often ignored side of bitcoin trading, which involves two parties privately agreeing to exchange assets between one another, is already estimated to represent about two-to-three times the value traded on exchanges — a proportion that is growing as more institutions move into the market.

But, in its present state, this form of trading runs against the peer-to-peer spirit of Satoshi.

Over-the-counter deals typically rely on an intermediary. This trusted party acts as an escrow service, charging a fee for receiving assets from both parties, and sending them on to each user. Yet there is no guarantee that the assets will be delivered, or that the expected amount will be received. Nor can timeframes be guaranteed as transactions can be held up by rogue traders and changed plans.

Qredo's Liquidity Hub uses atomic cross chain swaps to take the middleman out of the picture; creating a trustless trading venue where peer-to-peer transactions can be made without the fees and friction of intermediaries".

"For too long, peer-to-peer trading has been restricted to individuals, while institutions — which stand to gain the most from eliminating counterparty risk — have been left on the sidelines. The beta launch of the Liquidity Hub gives institutions the first taste of the granular governance control that can allow them to benefit from instant cross chain settlement."

"Qredo's Liquidity Hub sits on the trustless foundation of interoperability provided by our atomic swaps", added Co-founder Brian Spector. "This is the first of many dApps and decentralised protocols that will ultimately unite liquidity across different blockchains to create a fully decentralised financial stack."

"Qredo's new Liquidity Hub is an important step towards a more robust and investor-friendly ecosystem for digital assets", said Yoann Turpin, Head of Business Development at Wintermute. "By enabling low-friction, secure trading, this exciting new cross-chain venue supports Wintermute’s own goal of bringing greater liquidity and efficiency to the fast-developing crypto markets."

"The launch of Qredo's Liquidity Hub is a milestone for cross-chain infrastructure." added Evgeny Gaevoy (CEO), Wintermute. "This peer-peer venue will offer a trustless trading experience that enables both institutions and individuals to exercise unprecedented control over their digital assets. As the leading digital asset market maker, Wintermute is glad to support this innovation."

In the final release, the Liquidity Hub will enable private peer-to-peer trading via decentralized dark pools. Traders will be able to create their own rooms where trades cannot be observed prior to execution. In the interim, users are invited to provide feedback on the beta release via Telegram, Twitter, and email to [email protected].

The Liquidity Hub relies upon a unique atomic swap mechanism. Funds deposited on Qredo Network stay parked on the underlying chain where they are secured by an implementation of multi-party computation (MPC). The private keys controlling the assets are replaced with the right to run the MPC protocol that can sign transactions or generate deposit addresses.

When an atomic swap is made on Qredo Network, this ownership right is exchanged. On the underlying blockchains, nothing has moved.

Because the ownership right transfer takes place on the Qredo Network, there are no delays waiting for transactions to be confirmed on the underlying chain, and no miner or gas fees to pay.