Less than a year after the liquidity provider Wootrade was launched, the daily trading volume has steadily climbed to the tens of millions of dollars level.
Written by: Zhang Gaijuan
Generally speaking, in the stock market, liquidity is a key indicator of market maturity. For a highly liquid market, its biggest feature is that there are a large number of buyers and sellers in the market at any time, and investors can buy or sell enough assets at the fastest speed and at the best price. Positions without causing major fluctuations in asset prices.
The same is true for the cryptocurrency market. However, because the volume of the encrypted market is much lower than that of the traditional financial market, and the trading platform is relatively scattered, there is a slight difference between the two, which will cause small price fluctuations and price pinning, and affect the entire encrypted market. Therefore, in the encrypted market, liquidity is particularly important.
If the liquidity of an encrypted trading platform is large enough, users can instantly buy or sell a large number of encrypted asset positions at the quotation or the optimal price without causing large price fluctuations or rapid rebounds after small fluctuations. In other words, transaction speed, price advantage, market depth, and flexibility are the four key indicators for measuring liquidity, and these indicators are complementary, mutually reinforcing, and indispensable.
When the market environment changes, the demand for immediacy of transactions will become strong, and only when the market depth can withstand large enough transactions, users can quickly make transactions at the quotation or the best price. When a large-scale transaction occurs, another indicator “elasticity” becomes extremely important, which will directly determine whether the price can be adjusted and recovered quickly after a certain level of deviation.
Of course, the four key indicators of transaction speed, price advantage, market depth, and flexibility are also mutually exclusive. In addition, at this stage, the liquidity of the cryptocurrency market, especially the DEX trading platform, is still severely insufficient, and severe price slippage is likely to occur when large transactions occur. On the other hand, the impact of liquidity on the futures market is also very obvious, which will greatly affect the level of transaction costs. How to provide users with transactions without sacrificing any element has become an urgent problem to be solved.
Wootrade is a liquidity providing platform to solve such pain points. It can not only eliminate the factor of market liquidity dispersion, but also provide sufficient trading depth for customers such as exchanges, wallets, and trading institutions with zero handling fees.
What kind of project is Wootrade?
Wootrade can be understood as a highly liquid trading platform supported by a variety of intelligent trading strategies in the spot and futures markets. It is incubated by the quantitative agency Kronos Research , and its leadership team is composed of Kronos Research co-founders Mark Pimentel and Jack Tan , The team members are also from Carnegie Mellon University, Massachusetts Institute of Technology, Deutsche Bank, Shanghai Futures Exchange and other universities or well-known financial institutions.
Kronos Research, which incubates Wootrade, is a top ten global quantitative team founded in June 2018, with a monthly trading volume of up to 45 billion U.S. dollars . It is also the designated market maker for the three major trading platforms of Binance, Huobi and OKEx.
The blessing of Kronos not only enables Wootrade to aggregate the liquidity of major trading platforms around the clock , but also obtains the liquidity generated through Kronos’s high-frequency quantitative trading strategy. Together with the addition of more quantitative teams, Wootrade can provide its customers with deeper The trading depth or handicap to provide the best price and faster transaction speed. On the other hand, Wootrade has also brought digital asset dark pools and quantitative strategies into the DeFi field to promote the rapid development of DeFi.
Zero commission, high liquidity, and a bridge connecting DeFi and CeFi are the three main characteristics of Wootrade. At present, Wootrade’s alternative trading system (Wootrade ATS, WATS for short) can provide a depth of 10 BTC at a spread of 2 US dollars and a depth of 100 BTC at a spread of 10 US dollars, without any handling fees.
According to the real-time market data intercepted at 14:00 on October 30, Wootrade can provide a depth of about 500 bitcoins when the price fluctuates 1%, and 230 bitcoins when the price fluctuates 0.5% depth.
Wootrade handicap data intercepted at 14:00 on October 30
Through Wootrade, trading platforms and wallets can provide users with more favorable transaction prices and handling fees, and greatly improve user experience, without worrying about the price risk that large transactions need to bear. Small and medium-sized trading platforms can even get closer to the mainstream The distance to the exchange. The trading team can also use Wootrade’s high liquidity and depth to maximize its profitability. Compared with the third-party market maker team and the exchange’s own market making department, Wootrade can provide better depth, lower fees and risks.
From the early platform connected to Wootrade, we can see the promotion of Wootrade to the liquidity of these wallets or exchanges. Hufu Hoo and Matcha MXC are both early customers of Wootrade. In more than half a year of accessing Wootrade, not only the market data and liquidity of mainstream currencies have been greatly improved, but also the trading volume of the exchange.
According to data from Coingecko, after accessing Wootrade, the trading volume of both Hofu Hoo and Matcha MXC has increased significantly.
Hufu HOO’s transaction volume data in the past year
Matcha MXC transaction volume data in the past year
Wootrade said that thanks to product advantages and market expansion, the daily trading volume of the platform has steadily risen to the level of tens of millions of dollars after being online for less than a year. According to data provided by Wootrade, the total trading volume of the platform on October 20th reached 14 million U.S. dollars. Among them, the transaction volume of BCH reached more than 2.3 million U.S. dollars, second only to Huobi, Binance, OKEx and Coinbase. The fifth largest platform. On October 29, Wootrade’s trading volume exceeded 15 million U.S. dollars , a new high.
What progress has Wootrade made?
Financing support
Wootrade was officially launched in June 2019. At the beginning of the project development, it received extensive attention from many institutions and completed the seed round of financing invested by Dragonfly Capital, Fenbushi Capital, SNZ and DFund.
In the third quarter of this year, with the DeFi boom, the high liquidity and depth of Wootrade products have been unanimously praised and recognized by many exchanges and institutional clients, and have attracted the support of many investment institutions, including Dragonfly Capital, HashKey Capital , SNZ, DFund and other well-known institutions.
In addition, Wootrade has completed a $10 million private equity round of financing , with participating institutions including Three Arrows Capital, Fenbushi Capital, IOSG Ventures, QSN, Defi Capital, Genesis Block, etc.
Platform progress
At the end of last year, Wootrade released WATS version 1.0 . In January of this year, Wootrade began to provide full-featured dark pool services to exchanges and institutional trading teams through APIs.
In less than half a year, that is, in July, Wootrade upgraded to version 2.0 . The new version supports the access of more than 200 exchanges and institutional clients, and will join Kronos Research’s order flow trading strategy to further enhance WOOTRADE’s liquidity and facilitate trading. All users provide better transaction prices. WOOTRADE can currently provide more than 65,000 end users of cooperative exchanges with a trading depth of 100+ BTC at a spread of 0.2%.
This month, Wootrade launched the leveraged trading function to provide users with capital leverage and greatly increase the user’s capital utilization rate.
Cooperation progress
At present, there are more than ten exchanges and institutional clients cooperating with Wootrade, including Gate.io, DODO, MXC, Hoo, BitMart, decentralized trading protocol Injective Protocol, cross-chain value trading protocol MOV, LBank, Tongzhou Capital and Genesis Block, etc., and carried out in-depth cooperation in the market liquidity, to break the user scale and liquidity bottlenecks for exchanges, and to provide real-time price feeds for market makers to reduce transaction costs, and indirectly provide 65,000 end users with good Transaction depth and greatly improved user experience.
In the future, Wootrade will also cooperate with these platforms to explore user incentive mechanisms to further attract user participation, and will continue to seek cooperation with other exchanges or institutional clients.
WOO token distribution model and use cases
WOO is the native token of the Wootrade platform, dedicated to uniting liquidity providers and demanders into a mutually beneficial economy, thereby developing a self-sufficient ecosystem. At present, Wootrade has provided WOO liquidity support and is listed on Huobi Global, Gate.io, MXC, HOO, BitMart and other exchanges.
Token distribution model
The upper limit of WOO tokens is 3 billion, of which ecological rewards account for half , which is 1.5 billion. From this, we can see how much Wootrade attaches to project ecology and community development.
Distribution model of WOO token
In addition to ecological rewards, Wootrade also allocated 20% of the tokens to investors. Among them, the tokens for the seed round sale in 2018 will be unlocked linearly for two years and the private sale round will last for 6 months. In addition, the team and advisors will each receive 20% and 5% of tokens and lock them for 4 years, and 5% of the tokens will be used for liquidity management.
WOO token unlocking schedule
According to the project white paper , Wootrade will also use 50% of the profit to repurchase WOO and directly empower WOO.
Token use cases and effects
Wootrade hopes to use WOO to maximize the liquidity of the platform, while promoting the gradual shift of the platform to decentralization, and creating a virtuous circle and mutually beneficial ecosystem. WOO has the following use cases after its release:
Collateral : WOO may be used as collateral for transactions;
Mining: WOO available tokens reward the provision of high-quality orders as Wootrade node, to further encourage mobility platform;
Pledge : Pledge tokens in a market-making fund or pledge to obtain governance voting points.
Payment : It can be used to pay part of the margin and asset management fees.
Among them, after obtaining governance voting points, you can participate in Wootrade ecological governance, such as creating proposals and voting, including product and token functions, fee models, and token distribution models.
At present, Wootrade has brought high liquidity and good experience to a large number of terminals through cooperation with many exchanges and institutional clients. The issuance of WOO will enable more exchanges and traders to hold WOO tokens. In the future, ordinary investors can also participate in the Wootrade ecosystem through tokens, which will bring powerful network effects and super-value returns.
Wootrade’s future development direction
Short-term plan
Jack Tan, the co-founder of Wootrade, previously pointed out that in the near future, Wootrade will also launch a dark pool for derivatives trading to provide liquidity for exchange contract transactions. It is currently in the stage of sorting out customer needs. In addition, with the release of version 2.0, customers will continue to expand.
In addition, according to the white paper, Wootrade will activate the use cases of the token WOO in October and November this year, such as mortgage and payment.
long term plan
Wootrade believes that the power and freedom of trading should be controlled by traders. Wootrade’s final system will consist of three roles, including traders, routing agents, and matching engine nodes, and Wootrade will act as the link between these three roles. Specifically, the trader can match the engine node by encrypting the message and passing it to the routing node, and then the matching engine will take turns to match the order from the trader.
Shortcomings in the long run, the team plans Wootrade authority over Wootrade gradually decentralized, and create a transparent and fair to the center of the block chain management platform based on technology to eliminate the center of the model, such as technical defects, regulatory risk Wait.
With the continuous development of the cryptocurrency field and the entry of more institutions, Wootrade’s zero commission, high liquidity and depth, and fast-growing ecosystem are expected to attract more trading platforms, wallets and institutions, and will also trigger cryptocurrency transactions Change .
