QASH — Cryptocurrency Review

QASH

Welcome to my review of the QASH cryptocurrency! QASH is the utility token of the Liquid+ platform. I will start by explaining in-depth what the Liquid+ platform is, before going into detail what the functionality of the token is.

Liquid+ by QUOINE

Providing liquidity to the non-LIQUID Crypto Economy

Background of QUOINE

QUOINE LIQUID PLATFORM is a single-globally-sourced trading platform. QUOINE is an established cryptocurrency firm with an impeccable reputation. QUOINE was the first global cryptocurrency firm in the world to be officially licensed by the Japan FSA. QUOINE has created the QUOINEX and QRYPTOS trading platforms. QUOINE claims their trading platforms are the most advanced in the world, with annual transactions over $12 Billion. (Note: This whitepaper was written in October 2017 so the data is outdated.) The team has two and a half centuries of experience in finance and financial technology, so the team understands the industry inside out.

What problem does Liquid+ try to solve?

QUOINE has identified one fundamental element which they are going to address. The element is liquidity. Liquidity problems triggered many of the Global Financial Crisis’ most traumatic events. In the cryptocurrency market liquidity is left behind. There would be a big problem if an individual or business would have assets tied to a crypto token without liquidity. This issue already exists today. A problem with current exchanges in the cryptocurrency space is the pricing of cryptocurrencies. Because the market is still in its infancy and very inefficient, the best pricing for cryptocurrencies differs a lot. A given fact in the cryptocurrency space is that Korean pay a high premium on Bitcoin and other digital currencies. In the image illustrated below is shown how high the premium for Korean exchanges is:

Huge price differenced for bitcoin

The two Korean exchanges highlighted pay roughly a 6% premium on Bitcoin, which is significant. Another example of pricing differentiating a lot was the price of Bitcoin on GDAX (Coinbase’s exchange) during the Bitcoin bull run in November and December. At some point, a Bitcoin was traded for $19,100 on GDAX, and $15,500 on Bitfinex. Key problem: The liquidity of exchanges is only accessible to clients of that exchange, and not liquid enough to equalize prices of cryptocurrency pairs throughout the whole market. In traditional markets, there are large financial institutions providing liquidity such as Goldman Sachs and JP Morgan. QUOINE is trying to provide this liquidity in the Crypto economy.

The QUOINE LIQUID Platform

QUOINE is launching a platform which will be a single globally-sourced trading platform. This will be called the World Book. There will be an associated suite of services such as Prime Brokerage which will enable the highest level of liquidity.

All components of the Liquid+ platform

There are roughly 190 different currencies in the world. The large currencies like USD, EUR, JPY,etc. are liquid enough to trade against cryptocurrency pairs. However, minor currencies such as CAD, NZD, SGD ,etc. do not have a convenient and high-liquidity exchange. QUOINE is trying to solve this problem by bringing together all the cryptocurrency exchanges and all the traditional currencies to create one big platform.

World Book

The LIQUID platform will offer a multi-market order book that aggregates various order books of different liquidity sources and brings it together to one giant tradable order book. In addition, orders can be placed in one’s desirable traditional currency. The world book solves two important problems:

1. Liquidity Silo’s: Liquidity Silos are pockets of liquidity that exist because liquidity in one currency pair can not reach another. Example: BTC/USD on exchange A can not reach BTC/EUR on exchange B.
2. Underserved Markets: Smaller markets that, in isolation, are not big enough to support their own liquid Crypto Token.

Solution proposed by the QUOINE team: Connecting these exchanges into a single point of liquidity, and allowing the order book to be priced in any of the major currencies and many of the minor currencies. This is the World Book.

The World Book is a composite of two order books:

• Internal Order Book: An order book that contains FX-adjusted orders for all orders placed by users of the World Book.
• External Aggregated Order Book: An order book that contains all other orders (but FX adjusted) that exist throughout the world other than those placed in Internal Order Book. Each order in this book is linked to an order on the various exchanges internationally.

In summary, the World Book contains all orders from all exchanges in the cryptocurrency market. A short illustration of how useful this is: German trader (A) wishing to sell BTC puts his order on the world book. The German trader sees the order as BTC/EUR. A Singaporean trader wishes to buy Bitcoin. On the world book, the Singaporean trader sees the order as SGD/BTC. From the Singaporean point of view, the order will trade accordingly to the SGD/EUR rate. When the Singaporean trader fills the order of the German trader, both parties will receive their desired currency( respectively BTC and EUR), while seeing the order in their own currency.

The diagram below shows schematically how the order book operates:

Architecture of the World Book

1. Matching Engine: The matching engine built by QUOINE is one of the most advanced matching engines, and is capable of executing millions of transactions per second.
2. Cross Currency Conversion Engine: This engine automatically executes the FX transaction needed to make the world book functional. It uses real-time data and constant updates to the real rates. It is not only limited to Forex, cryptocurrencies can be converted instantly as well.
3. Smart Order Routing: This technology maintains the order books from all over the world, displaying real data. If an order is placed on the world book and no match is available internally, the smart order routing checks if an appropriate match can be found on another exchange. If so, it automatically routes the order in the currency of the order on the other exchange.

Prime Brokerage

Another application on the LIQUID platform is Prime Brokerage. Users are able to trade on any global reputable exchange, without even having an account or funds on those exchange. This is huge if the team can deliver this. For anyone investing in cryptocurrency, the struggle of having an account on multiple exchanges is a hassle, and trading on many exchanges from one place would be very convenient. The team states Prime Brokerage to have these 3 benefits:

1. Reduction of Counterparty Risk: Customers only need to deal with QUOINE as a counterparty, instead of multiple exchanges. QUOINE is regulated, which is beneficial.
2. Increase in Capital Efficiency: LIQUID Platform users will not have to move capital over from one exchange to another.
3. Netting of Positions: Users of the LIQUID Platform will have the ability to net positions taken across different trading venues. This will allow market participants to better take advantage of inefficiencies in the sometimes fractured crypto markets.

Prime Brokerage consists of three main elements

• Direct Market Access: As mentioned earlier, Smart Order Routing allows customers to trade multiple markets through one platform.
• Fiat Management: Moving large amounts of fiat is slow, expensive and time-consuming. QUOINE has built an extensive network of relationships with banks, locating their bank accounts with those of big exchanges for faster transactions. QUOINE is also working with a major global bank to provide fiat transfer optimization using the Prime Brokerage. QUOINE is planning to obtain a Funds Transfer Service Provider License and any other permits or licenses when required.
• Crypto/Fiat Credit: This allows users to borrow using either fiat or cryptocurrency to leverage trading. QUOINE is also in the process of applying for a Formal Banking License.

Other Services

• Automated Trading Strategies: The LIQUID Platform provides access to third-partytrading strategies, and to its own automated trading and market-making strategies. This means customers can use trading algorithms to execute trading for them. Examples of trading strategies use cases:
• ICO token issuers can use automated market making strategies.
• Experienced trading system developers can design their own strategies and perhaps even sell them to others.
• Crypto holders can select different assets with different strategies to be executed (different risk management for each crypto asset, etc.)

The QASH token ($QASH) ($QSH)

Technicals:

• Market Cap (27–02): ~$300 Million
• Price: $ 0.86
• Circulating Supply: 350 Million
• Total Supply: 1 Billion.
• All Time-High: ~$840 Million; $2.40
• Type of token: ERC-20

Concern about circulating supply: Only 35% of the total supply is in circulation at the moment. If the other 650 million were to be put on the market, this would cause massive inflation, causing the price to drop massively. However, the team is locking up these tokens. This is similar to Ripple, as their circulating supply is also a small portion of the total supply. The token allocation looks like this:

The tokens are locked up 5 years, which is a good sign and not implicating a possible dump of tokens by the management team to take profit and leave the project. 15% of the tokens are allocated to strategic partners/institutional buyers. This is a good sign as well, showing the interest from the institutional side — something which we are not seeing currently in the cryptocurrency market.

The QASH Blockchain

QASH is an ERC-20 token for now. This means it is on the Ethereum blockchain. However, QASH plans to run its own blockchain. They plan to launch their own blockchain in 2019. This is more than a year away from now, a long time in terms of the fast-moving cryptocurrency market. The blockchain is said to have sophisticated financial industry programming languages for design and construction of smart contracts. This will allow financial institutions and fintech startups to build decentralized services on the QASH blockchain.

Functionality of the QASH token

QASH is a utility token of the Liquid platform. It will have two main functions:

1. As a Crypto Token users can pay services on all of our platforms (similar to most tokens on a platform like Ethereum, Lisk, ICON,etc.)
2. As a tradable Crypto Token on the open market.

The second one is interesting, however very challenging. Right now, most coins are traded and valued in terms of Bitcoin. QASH wants to change this, and envision QASH to become the preferred standard token used to pay for services provided by the broader financial industry. This is miles away, but an interesting and ambitious vision, however.

To further elaborate on how the token will grow and increase in value, the team states this in their whitepaper: ‘’As the demand for the LIQUID Platform grows, the utility of QASH will increase and will allow QASH holders to use its value to “pay for” all services and functions QUOINE and its partners will provide.’’

In conclusion, the value of the QASH token is entirely dependent on the success and adoption of the Liquid platform.

Who benefits from using the Liquid platform?

For individual and institutional traders the Liquid platform offers Great technology (SOR, etc.), Access to the World’s liquidity (especially important for institutional investors), Reduced Risk, Access to Professional-Grade services.

Another point that I want to highlight as a benefit stated in the white paper is the benefit of token holders. An increase of liquidity for cryptocurrency will increase price stability. ‘’The LIQUID Platform’s success will benefit token holders by providing increased price stability and less market manipulation, leading to higher valuations of their Crypto Token assets.’’ Market manipulation is happening a lot in the cryptocurrency market, however this benefit once again is a rather ambitious goal.

Roadmap

Their roadmap dates back all the way to 2014, which is much longer than most Crypto projects. Looking at the roadmap, 2018 is scheduled to be an existing year for QUOINE. The World Book Beta is scheduled for Q1 2018, which means it could launch any day. This could bring more market makers to Crypto. Q2 2018 is the exciting official QUOINE LIQUID launch. I expect an explosion of the platform usage when this is successfully released. Looking further at their roadmap, we can see the blockchain release in Q2 in 2019, and the Banking Licence in Q3 2019. Overall, their roadmap looks detailed, and it shows that much work has been done by the team already.

The Team and Company

The QUOINE team is an outstanding team. What differs them from most other cryptocurrency projects is their professional attitude. The designers of the Liquid platform should not just be looked at as a team, but rather as a company. It is one of the strongest teams out of any cryptocurrency project as of now. As mentioned earlier, they have 250 years of combined experience in finance and technology. Their team members have worked for some of the largest companies in the world. I’m not going into their personal experiences, as this can be read on their website. The company achieved some milestones already, having built the QUOINEX exchange and achieving a regulation by the Japan FSA.

What also stands out in comparison to other Crypto projects is their directors, advisors, and shareholders. Some of Japan wealthiest individuals are involved in this project. The Board Director is Masaaki Tanaka, a Senior Global Advisor for Pwc. Their investors consist of chairmen of the Internet Bankers Association, Singapore Telecom Group, Singapore Airlines, and many more wealthy individuals.

In addition, 7 Ventures are also investors in QUOINE. JAFCO, B Dash Ventures, SBI Investment, Mistletoe, Digital Garage, and ULS Group.

The professionality of this project is truly outstanding.

How big can this project actually become?

QUOINE is targeting institutional investors. Let’s take an example of a liquidity provider in traditional markets. JP Morgan is worth around ~$400 Billion. However, they are just a small part of the liquidity provider of traditional markets. Let’s assume no other liquidity providers exist, and QUOINE is able to have an equal share in the Crypto market, as JP Morgan has in traditional markets. The total money supply is around $84 Trillion. $400 Billion / $ 84 Trillion = 4.76%. The current cryptocurrency market cap is around $500 Billion. 500* 0.0476 = $23 Billion market cap for QUOINE and the QASH cryptocurrency. If the cryptocurrency market cap increases to $1 Trillion in 2018, this would be $46 Billion. A $2 Trillion Market cap would implicate a $92 Billion market cap.

Their current Market Cap is around $300 Million. So, this would respectively imply a 76x, 153x, and 306x increase of their market cap. The potential for QASH is huge.

Concerns

The Liquid platform is a great idea, however, I do have some concerns.

• The first one is the usage of the QASH token. It is a utility token, however, will large institutional players prefer the QASH token to move funds around?
• Another concern is the centralization of the QASH token. QASH is one of the most centralized tokens, like Ripple. It goes against the decentralized vision of the cryptocurrency markets. However, large institutions might prefer some centralization of their funds. It is something to keep in mind though.
• Their project is VERY ambitious. This is probably one of the most ambitious projects in the cryptocurrency space. This could lead the team to lose the focus on their main goals, and end up wanting to do too much.
• They are very dependent on reactions of institutional investors. if institutional investors and banks do not share the vision of QUOINE, their project will have little use.
• Circle bought Poloniex yesterday (26–02). Goldman Sachs is an investor in Circle, and this could mean Goldman Sachs is entering the cryptocurrency market on their own, and not doing this via a platform like Liquid+.

Overall Review

The Liquid Platform is an outstanding project. They are trying to solve the big problem of liquidity in the crypto market. The solution of the World Book, Prime Brokerage, and Automated Trading Strategies are revolutionary for the cryptocurrency market. Their roadmap is detailed, and exciting times are ahead for the projects. Their team is phenomenal, and they have good established connections with large liquidity providers. The room for growth for this project is just mind-blowing. The biggest concern,however, is IF they can make the project succeed.

I expect QASh to be a top 20 currency- if not top 10, at the end of 2018. Overall rating of the project: 4,5/5.

Thank you for reading this review! Make sure to follow me on Twitter (note the capital I): @DecentraIized