Lykke & Nxchange to Launch New Tokenized Securities Exchange

  • Experienced trading platform developers, Lykke and Nxchange, will be launching a tokenized securities exchange. 
  • In addition to cryptoassets, the new exchange will facilitate the trading of traditional assets such as equities and bonds.

Lykke, a Switzerland-based developer of a blockchain-enabled ”global marketplace for the free exchange of financial assets”, and Nxchange, a “regulated market / multilateral trading facility-licensed” Dutch securities exchange platform, have partnered to launch a Europe-based regulated tokenized securities exchange.

According to the announcement’s press release, the partnership will involve Lykke becoming an equity shareholder in Nxchange.

The development of the new securities exchange platform will be funded by Lykke.

Trading Cryptoassets, Equities, Bonds, Investment Products

Notably, the exchange will use proprietary blockchain-enabled “cryptoasset trading infrastructure” developed by Lykke. Nxchange is expected to contribute to the project by helping to “facilitate safe and regulated trading” on the new tokenized securities exchange.

Investors will be able access “a far greater and more diverse variety of financial assets” via the regulated platform, and the Lykke Nxchange wallet will be provided to users so that they can “access and store digital assets on the exchange.”

Any asset or security such as traditional equities, bonds, loans, and investment products may be “tokenized and traded” on Lykke and Nxchange’s blockchain-powered trading platform.

Moreover, the exchange will use “embedded” smart contracts to “guarantee the rights of all users” - which includes the distribution of dividends, “voting rights”, and “asset ownership.”

A "More Equitable And Democratic Financial World"

Nxchange has also partnered with ABN Amro, the third largest bank in the Netherlands, in order to develop a distributed ledger technology (DLT) based bank account. It will be used to settle transactions in “real-time against fiat currencies” - which will be held in the “custody of ABN Amro clearing bank.”

Commenting on the development of the tokenized securities exchange, Richard Olsen, the founder of Lykke Corp. and futures commission merchant, OANDA, said:

This is a historic day - not only for Lykke and Nxchange as companies – but for our broader shared vision that is targeted at a more equitable and democratic financial world. The increasing acceptance of digital assets and blockchain infrastructure as the technology of the future correctly comes with a greater emphasis on regulation and compliance. This partnership envisages to satisfy all these things while still bringing all the benefits of transformative technology to any individual who wishes to access or exchange anything of value.

Richard Olsen

"Real-Time, 24/7, Transparent" Capital Market Transactions

Marleen Evertsz, the founder and CEO of Nxchange, remarked: 

We believe that the time has come for a more modern form of capital market transactions: efficient, real-time, 24/7, transparent, and supported by compliance procedures that assure maximum security. We are delighted to partner with Lykke and to join forces in building the Next Generation Stock Exchange.

Marlene Evertsz

As CryptoGlobe reported recently, South Korea-based crypto exchange, Bithumb, and American crowdfunding platform, SeriesOne, have announced that they will be launching a US-based securities token exchange.

The exchange is expected to go live in early 2019.

Four Exchanges Represent 96% of Crypto Derivatives Trading, Report Shows

Four exchanges represent 96% of the total crypto derivatives trading volume. According to figures from CryptoCompare’s December 2019 Exchange Report, OKEx is the leading exchange in crypto derivatives trading.

The report shows that during December, OKEx registered an impressive $3.32 billion in daily trading volume. This represents 35.8% of the total market share in crypto derivatives.

Following closely behind is Huobi, with $2.7 billion in daily trading volume and a 29.16% market share. Further behind is BitMEX, with a volume of $1.9 billion and 19.7% market share, and Binance, with a volume of $797 million and 11.4% market share.

Out of all the big exchanges listed above, OKEx was the only one that saw its volume go up. Trading a total of $99.6 billion in crypto derivatives in December, OKEx registered a growth of 11% in comparison to the previous month. Huobi registered $76.5 billion but showed a 14.5% decrease in volume from November, and BitMEX accounted for $51.1 billion and was also down 28.8%.

OKEx was also the third biggest exchange in Ethereum perpetual futures. Following behind it was BitMEX (44%) and Binance (23.2%), OKEx controls roughly 20.8% of that market with a $1.7 billion in trading volume.

Market Leader in Crypto Derivatives

Although BitMEX is leading in the ETH and BTC perpetual futures, OKEx is the top exchange when it comes to crypto derivatives. Founded in 2017 and based out of Malta, OKEx is one of the biggest cryptocurrencies in the world. In fact, in May 2018 OKEx was the world's largest cryptocurrency exchange by reported turnover.

Having launched its own native token in early 2018, the OKB token, the OKEx team is actively working to improve its platform and services. OKEx has its own blockchain in the final stages of testing, OKChain, and has future plans to release a decentralized exchange, OKDEx. Both these products will expand the OKEx ecosystem and add features to its OKB token.

Despite these developments, OKEx continues to focus and give special attention to the derivatives market. In recent months, the company released a data analytics platform for derivatives trading, Bitcoin futures contracts margined with Tether (USDT), and Bitcoin options trading that are scheduled for public launch this month of January.

Despite the success, many in the industry have questioned OKEx’s trading numbers, accusing the company of wash trading, fake volumes and market manipulations.

Growing Popularity

The crypto derivatives market has shown fierce growth since the Chicago Board Options Exchange (CBOE) started trading bitcoin futures back in 2017. Crypto derivatives have grown throughout 2019, both in numbers and in product variety, and most exchanges who adopted such types of products have registered unprecedented growth.

Despite their bad reputation, commonly pointed as the cause behind the fall of America’s former energy and commodities firm Enron, derivatives have brought growth and attention from the general public to the crypto industry. And this trend seems to be ongoing, as just two weeks ago the Chicago Mercantile Exchange (CME) released the long-awaited Bitcoin options, sparking tremendous interest from investors and fueling the busiest crypto derivatives trading day of 2020.

The launch of Bitcoin futures by the CBOE and the CME caused significant price spikes, and promoted the interest of the general public on cryptocurrencies, opening it to a wider audience. It is possible futures will make the crypto market more stable, as in traditional finance it has been shown to make the underlying asset balance out price fluctuations.