LN Markets, the first bitcoin (BTC) derivatives exchange built on top of the Lightning Network (LN), reached USD 6m in total aggregate trading volume and is now raising capital in order to accelerate its growth.
The platform was launched in December 2019 in Beta, while their Alpha version went live in March this year. Since December, the exchange has processed over 22,000 trades.
The company started their fundraising process a few weeks ago, LN Markets co-founder Romain Rouphaël told Cryptonews.com, declining to elaborate any further.
Currently, the platform has around 1,000 daily active users. Trading limits are still small because the platform is still in Alpha. Traders can only trade up to BTC 0.01 (USD 92) at this point in time.
According to Rouphaël, in their product pipeline, there are bitcoin options, a bitcoin volatility index, and a new financial instrument called “liquidation killer.”
The idea behind the liquidation killer is to prevent traders from getting their positions liquidated from sharp price movements as is often the case on existing exchange offerings. To prevent that from happening, a trader can purchase a liquidation killer that prevents liquidation, for example, for a 24-hour period. The option to purchase a liquidation killer will be available for all trades and the payment of the premium will be automatically added when the margin is paid.
Additionally, LN Markets is keen to develop financial products on top of the Lighting Network using the RGB Protocol.
It is a smart contract system built for the Lightning Network that enables the issuance of fungible and non-fungible digital assets as well as digital identities, similar to ERC smart contract standards for the Ethereum (ETH) network.
Using the new LN smart contract technology, the platform plans to add stablecoins to its platform to enable financial products to be quoted in dollars and euros in addition to bitcoin.
A trading API is also on the roadmap to enable traders to plug into LN Markets directly.
BitMEX on Lightning
The platform was founded by a group of ex-traders who left banking for Bitcoin in 2015. After several years of consulting and developing blockchain solutions for financial institutions, Côme Jean Jarry, Victor Afanassieff, and Romain Rouphaël founded the company in 2019 to build an entirely new trading experience with instant delivery versus payments – made possible by the Lightning Network. The team is located in Paris, France.
“When the Lightning Network came, we had the idea to build a type of BitMEX on the Lightning Network, where you could instantly send funds when you enter a position and get them back directly into your wallet when you close it out,” Rouphaël said.
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