The cryptocurrency market cap is a bit over $200 billion and the daily exchange volume is around $15 billion. However, the volume I am stating is what’s reported by Coin Market Cap, and that website can only state what its exchange APIs report. There’s a lot of cryptocurrency trading that happens off the exchange, and this trading is called over-the-counter (OTC) trading.
Over-the-counter trading is a preferred way of trading for those who seek to move large amounts of coins. Buying or selling a million dollars worth of a single coin can move exchange books by a large percent, and that’s why large orders are often fulfilled by OTC agencies. In some cases, some coins simply don’t have an ERC-20 token and use a native coin. This makes listings difficult and their investors could have to wait large periods of time before being able to trade on any exchange; OTC trading is often the only way to move native coins that have just been released.
While over-the-counter trading is common in the cryptocurrency market, it isn’t something new developed with the rise of cryptocurrencies. Investment banks are notoriously known for some suspicious activity in dark pools, which are a means to provide liquidity to clients without fulfilling order on a stock exchange.
OTC trades serve a great purpose for both stock traders and coin traders, but they put an imbalanced amount of power with the middleman. Anyone involved in an over-the-counter trade has to deal with a broker or agent and must trust the agent. There are many examples in cryptocurrency OTC trading which show that an OTC trader can just run off with a person’s funds. Meanwhile, IB dark pools show that even major OTC trading agents can be difficult to trust as dark pool trading is often seen to be slightly bent in the favor of the bank.
Blockchain can Handle OTC Trades
With advancements in blockchain technology, smart contracts are becoming capable of handling tasks that used to require humans; the good part is that smart contracts do not need people’s trust to build a market.
Vena Network is creating untampered smart contracts that can be used to provide financial products and services. One of the best uses of the Network will be secure OTC trades. Rather than trusting a middleman, traders will be able to build or use a smart contract that handles the trade. Both the buyer and the seller will send funds to the smart contract rather than an agent. Then, once the smart contract has received funds from both sides, it will carry out the trade.
Smart contracts turn OTC trades into an automated process that does not need a middleman. If over-the-counter trades are handled by a smart contract, there is no concern of an agent running off with the funds, and there is nothing better than peace of mind. The tallied benefits here are increased security and lower fees.
OTC trades, though, can cover various conditions and so Vena Network keeps its smart contracts untapered, allowing market participants to utilize them for a host of financial services and products. OTC trading is one of the markets that can greatly benefit from Vena Network’s provision of smart contract-powered OTC trades.
Vena Network is more than just smart contracts, though. A Jury will work to provide just decisions to resolve disagreements. Some things need the human touch and Vena ensures these situations can be handled by the Network. So, jury members, who must all stakes VENA tokens, provide the human touch needed to resolve difficult conflicts. This not only gives Vena Network a realistic operational functionality, but it also allows the Network to have a good customer service as people tend to prefer human engagement for resolution of conflicts.
Company
Website: http://vena.network/en
Whitepaper: http://whitepaper-zh.vena.network/
Telegram: http://vena.network/en
Twitter: https://twitter.com/VenaProtocol
Github: https://github.com/venanetwork
Proof of Work for https://bitcointalk.org/index.php?action=profile;u=1887821
